The Importance of Capacity Planning in Manufacturing

 You have a Master Production Schedule (MPS), you have verified your Bill of Material (BOM) and have all components ready to go for your manufacturing/work/production order. Now, how much time will this production take? When will it start, end, and how can this be visualized?

These are all questions I have asked at various points throughout my supply chain career, and each organization I have worked for has a different approach for this. In this post, I’ll cover some ways we can address this based on the resources you have available. We will assume your production BOMs and routings are accurate and you schedule a mix of items over the horizon of a few weeks. The below sections start of with the most ideal situation first, working downward through less options which could still be suitable for you.

Best

Check your Enterprise Resource Planning (ERP) software for available graphical capacity management tools. In SAP, common transactions are CM21, CM25, and CM29, which facilitate drag-and-drop scheduling of capacity requirements to work centers supporting the production of a given material.

The blocks represent the amount of time required to produce a given quantity of material on the work center they are dispatched to. When a capacity requirement block is moved, the scheduled start and end times for production of the material are automatically updated. The planning table can be used to optimally sequence production batches based on your requirements, and changes are not saved until you press the Save button.

Better

If your ERP software does not have native functionality to perform Gantt style capacity management, you might need to utilize a bolt-on solution. Sometimes, these are offered as up-sale items from the ERP software provider but might be offered by third-party solution providers. Very old or lesser-known ERP systems are usually in this bucket.

If you work for a larger organization with an IT department, they may have developed an in-house solution. Reach out to others on your team or within your IT department to learn more about options the company already has.

Unfortunately, using lesser-known or very old ERP platforms can be very limiting, especially when it comes to easy ways to manage your capacity for the purposes of generating a production schedule and making supply commitments to customers.

Good

This option is not ideal because it is error prone and usually lacks a direct tie to any master data you already have in your ERP system. The solution: use Excel or another spreadsheet program to build your own Gantt chart for visualizing capacity requirements and resolving capacity overload.

While this option is not very good, it is the solution I have seen people most often turn to for creating a tabular version of a production schedule. If the production is repetitive (using run rates as the variable in the production schedule) or batch (and batches run back-to-back all the time, leaving no room for downtime on the work center), this can be used to help determine production start/end dates/times and to provide a production sequence to operations for execution.

The basic approach here is to use the Y axis of the workbook to list the products or work centers, and the X axis represents the time series info which will display what products will be run on certain work centers and during what date/time using various colors to easily distinguish each product.

What else?

If you have access to business intelligence tools and ways to automate the extraction of information from your ERP system, you might have some other ways available to visualize capacity requirements on the work centers you schedule. For example, you could use Power Automate Desktop to extract information from your ERP and place it in a folder at prescribed intervals or on-demand. You can then use Power BI to transform this data into a report, which can include a Gantt visual to help you better evaluate your capacity situation.

Considerations

As of the writing of this article, I am unaware of free solutions which perform capacity requirements planning as a standalone offering that you can connect to your existing ERP package. These are often called Advanced Planning and Scheduling (APS) tools. If you know of any available, please comment!

There might be some free ERP offerings out there (such as Dolibarr) which might have a Gantt visualization of your production schedule and capacity requirements offered as part of the ERP solution. If you are looking to use a solution which is both free and open source, make sure the licensing permits you to use the solution the way you intend to use it.

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