Capacity Planning

Capacity Planning is the most important "modelling" requirement of any business or organisation.

Effective capacity planning will produce a detailed understanding of the entire operational requirement relative to demand for products or services. The Capacity Plan starts with a seasonally adjusted expectation of the demand pattern for the organisation's "outputs" - i.e. its service provision or its product delivery to its customers

In a world where there are highly volatile events taking place on a regular basis, it is important for a business to be able to react very quickly to a change. These events are almost always outside the control of the company and could result in reduced demand relative to forecast, or increased cost relative to budget. During a Project, SYSTEM 21 consultants help our client management to develop the most sophisticated forecasting and capacity plan based models of the business, with contingency plans in place should there be a sudden reduction in demand or an increase in raw material cost. The aim is to optimise profitability whatever happens and to protect the workforce against adverse trends in the economic background. Our past clients, using these techniques, have been able to manage a downturn and grow more rapidly than competitors in periods of prosperity..

SYSTEM 21 specialises in the development and planning of "Optimised" Capacity

There are two elements to capacity planning - "Macro" and "Micro". Macro planning will produce a capacity plan for the whole operation, with resource allocation, financial costs and growth trends etc for the full financial year and beyond. The "Micro" plan will enable resources to be planned against shorter timescales - a month, a week, a day etc.

If too much resource cost is planned (or rather, not planned ) against a short term drop in activity, the cost ratio is too high and leads to reduced profitability and excess cost. Both of these impact the organisation and present a threat to its workforce in the medium and long term. It is therefore important to get this planning right if both the organisation and its workforce are to be protected.

Our specialist teams gather together volume projections, footfall seasonality patterns and historic trends to determine the activity level required. In the NHS this is directly linked to patient waiting times and the level of perceived patient experience. In business and industry, the activity level translates as revenue or sales income - the "top line" of the business, but broken down into the related activity required.

SYSTEM 21 will then produce a detailed optimised programme of resource requirement, matching the activity level and taking account of lead times from suppliers and distribution methods. The Capacity Plan drives the annual budget, monthly performance measurement and daily / weekly planning cycles.

Capacity plans can also be used as a diagnostic tool to assess the capability of a business, review "bottlenecks" in specific parts of an organisation, or to make rapid and accurate adjustments to costs in line with a change in volumes. All organisations need to be able to "react fast" in all sectors of the economy and the ability to adjust the short and long term capacity planning model is invaluable as a protection to the workforce.

Fill out an enquiry form to understand how our inspired capacity planning techniques can benefit your business or organisation. We have hundreds of examples and case studies to demonstrate the power of this basic business tool that is so often lacking or absent in the workplace.,

CASE STUDY 1

Multi Billion € turnover, heavy engineering downstream manufacturer supplying laminated, single and double glazed, domestic and industrial units to the wholesale and automotive market. Unable to service customer demand due to poor internal business controls and lack of scheduling. Their problems, and their later much improved level of costimer service, was actuall featured on the BBC2 programme "Grand Designs"

Our role

To restructure and install internal controls, capacity planning ( macro and micro ) and a sales system to deliver front end increase in business demand.

Outcome

Delivered profit increase in excess of target.  Capacity planning and production programming systems installed with full management reporting based on KPI’s. Restored customer confidence with service level increase from 50% to 97%. Sales system drove 15% increase in sales from new and existing customer base and capacity planning resulted in balanced production from 8 outlets in the UK. Recurring annualised savings achieved were over £ 13m

In the BBC Grand Designs programme, factory management were interviewed and talked enthusiastically about their much improved planning and organisation methods and the fact that 99% of their orders were, by then, going out on time.

CASE STUDY 2

Supplier failure to deliver enough helicopter blades to the assembly line of a military helicopter manufacturing operation was causing massive lost time and production delay.  There were technical problems and scheduling issues that were identified as the root cause of the delay to Assembly operations. Capacity form the line appeared to be at maximum.

Our role

To develop and implement rapid capacity planning tools to balance the production of core components and labour resource on the blade lines. Each part of the production line was to be re-balanced relative to the capacity of each next stage.

Outcome

Optimum output rates were achieved based on the highest throughput of the fastest part of the line. The rest of the line was capacity planned to meet this rate. SYSTEM 21 balanced the production capacity and corrected the supply chain failings, which also needed to be capacity planned from sub assembly suppliers.. The increased manufacturing performance generated savings of over £ 20m per annum in the Client manufacturing plant with additional £ 5.3m savings in the supplier plant.

CONTACT US for more information or email to info@system21.co.uk

SYSTEM 21

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Services Overview

Professional change management and transformation services, including full implementation of all recommendations. SYSTEM 21 has an enviable track record of 100% successsful projects.

  • - Profit improvement with full implementation
  • - Busioness diagnostics and transformation
  • - Change Project Management

Contact Us

To contact us please fill out a general enquiry on the Contact page, phone or email or text as below.

Address: 270 Castle Street, Dudley DY1 1LQ, UK
Telephone: +44 (0) 1384 456 760
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E-mail:info@system21.co.uk