Finite Capacity Planning

What Is Finite Capacity Planning?

finite capacity planning

Finite capacity planning is a production planning and scheduling strategy that assesses the production capacity of a manufacturing facility. With finite capacity-based planning, the maximum capacity of the facility and its resources — including available machinery, work centers, staffing, inventories,  work-in-process (WIP) buffers, among other aspects — is calculated. Then manufacturing is scheduled according to this capacity.

The finite capacity planning process occurs in production scheduling software, and the required input data is pulled in from connected manufacturing management systems including:

  • Enterprise resource planning (ERP systems)
  • Manufacturing execution systems (MES systems)
  • Material resource planning systems (MRP systems)

Capacity can be defined using Excel or another legacy solution — personnel need only understand the resources available to them and then carry out a simple calculation based on this to arrive at maximum production capacity. However, this does leave a significant risk of error. A far more reliable — and effective — strategy is to deploy enterprise planning software to give you a clear picture of the capacity of your shop floor.

This strategy provides a strong understanding of precisely what a manufacturing facility is capable of and exactly how this can be achieved. There is no danger of resources being exhausted or production falling behind schedule as the availability has been accurately defined ahead of time. A manufacturer will have the confidence to know if they can meet customer demand, whether it be in the form of a sales forecast or purchase orders with definitive due dates.

What Is the Difference between Finite Capacity Planning & Infinite Capacity Planning?

Finite capacity planning is not the only capacity-based scheduling strategy. Facility managers may also decide to operate an infinite capacity planning model. But how exactly does this differ from finite capacity planning?

Perhaps the most fundamental difference between finite capacity planning and infinite capacity planning is the starting point for the process.

  • Finite capacity planning begins with accurate calculations regarding the available resources at a facility, providing a solid foundation of knowledge for your team to build upon.
  • Infinite capacity goes the other way, beginning with the fixed end date of the production phase. This strategy does not factor in any constraints on available resources. Instead, it starts with the number of products required to fulfill an order and works backward to make the facility's resources fit this requirement.

In reality, infinite capacity planning does not provide infinite capacity. Instead, it works to push the available resources to as great a capacity as possible and get as close as possible to the required manufacturing target. It also does not take into account any other projects that the facility is working on — and any other resource allocation. As such, it is easy to overload the facility, resulting in production scheduling delays.

Finite capacity planning provides a much more reliable and realistic overview, offering discrete data that outlines what the facility is capable of producing at any given time.

How Do You Calculate Capacity?

In a basic sense, capacity can be considered to be the number of products you can manufacture in a given time period. For example, you may have been able to produce 15,000 of Product A in a week on a past project.

However, this is likely to be an oversimplification in most cases. For example, if Product A is made up of Component 1, Component 2, and Component 3 manufactured sequentially, then you may need to break this down further. For example, there may have been a time toward the end of production that the production phases for Component 1 and Component 2 were idling, and only Component 3 was still in production.

Why does this matter? Because, if you were to double the order to 30,000 pieces of Product A, you would arrive at a lead time of two weeks according to the simplified equation above. However, this would be inaccurate, as you would already have begun production on a new batch of Components 1 and 2. In reality, the total lead time would be somewhat shorter than two weeks because the simplified equation has not taken the idle production phases into account.

This underlines how difficult it can be to deduce total capacity using only pen and paper.  To successfully conduct finite capacity planning, you will need the help of a sophisticated production scheduling system.  Productions systems that have work best for finite capacity planning have material requirement planning (MRP) or just-in-time (JIT) planning capabilities.  Today there are scheduling systems, like Optessa, that offer both MRP and JIT functionality to allow for flexible finite capacity planning.

Types of Capacity Planning Strategies

Lead Capacity Planning

Lead capacity planning takes into account any potential increases in demand that may occur in the future — for example, seasonal increases or other demand fluctuations — to eliminate inventory shortfall. This is then matched to the calculated capacity of the facility. Demand predictions should be made with great care, as missed calculations can result in too many or too few items produced.

Lag Capacity Planning

While lead capacity works on predictions and forecasts, lag planning is more conservative. With a lag capacity planning model, the facilities' resources are allowed to reach their limits. Then, strategies are applied to increase this capacity. Production efficiency is improved and no surplus products are delivered, although lead times might be extended when more capacity is added.

Match Capacity Planning

If lead planning is proactive and lag planning is reactive, match planning is somewhere in between. Rather than forecasting demand ahead of time or only adding capacity once the existing limit is reached, match capacity involves adding capacity in small increments, according to market forces. This requires a series of complex calculations but can be effective if executed properly.

Dynamic Capacity Planning

Dynamic capacity planning relies on data to extend or retract capacity during the production phase to achieve the most efficient use of resources. This is similar to match capacity planning but is even more complex, necessitating the deployment of finite capacity scheduling software. The master production schedule (MPS) can be altered and adjusted mid-project.

Finite Capacity Scheduling Software

Finite capacity scheduling software provides businesses with a range of different benefits and capabilities. These include:

  • Better operational visibility, predicting and preempting potential issues
  • More streamlined processes, supporting swifter deliveries
  • Greater understanding and insight into your processes
  • A better customer experience — pass this understanding on to your customers
  • Meet deadlines with increased efficiency
  • Effective supply chain management — improve partner relationships with increased efficiency
  • Eliminate potential loss and shrinkage in your inventory
  • Effective planning for capital investment — better returns on this investment
  • Reduced potential for costly errors or oversights — improved production cost control

Find Out More About Finite Capacity Scheduling Software and the Benefits It Provides to Your Manufacturing Business

Optessa provides Advanced Planning and Scheduling (APS) manufacturing software that works alongside your existing digital platforms to provide exceptional finite capacity scheduling capability.  We offer on-premise or cloud-based implementations to suit whatever type of integration works best for your manufacturing operations.  Get in touch with our team to discover more.

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