& 4 Capacity Planning Mistakes to Avoid
5 Capacity Planning Strategies & 4 Capacity Planning Mistakes to Avoid
Over the past few years, companies that have been agile and able to respond effectively to change have seen greater success. Many have outdistanced their competitors by being able to quickly assess projects and forecast the ability to manage projects effectively.
In times of extraordinary change, capacity planning is an even more essential ingredient to evaluate and manage projects and resources.
The 5 Benefits of Strategic Capacity Planning
Strategic capacity management is a process to determine what resources you need to meet demand and plan your workflow accordingly. Strategic capacity management provides you with control and visibility of your resources across all areas of your business, so you manage the demand to bring projects in on budget and within established deadlines.
- Maximize utilization: Get more done without adding additional resources or staffing.
- Real-time data: Get accurate information on time availability and usage to increase the rate of project success and on-time delivery.
- Better planning: Enhanced visibility helps you better meet the demand for resources.
- Avoid clashes: Reduce clashes, conflicts, and bottlenecks by balancing your workload.
- Organize your time: Know what’s coming next, analyze various scenarios, and prioritize workflow.
Using Cora strategic capacity management software, you can start with a template and create an accurate, detailed plan quickly. What-if scenarios help you to visualize potential issues or changes and determine resource needs.
Capacity Planning Strategies & Best Practices
Applying best practices can help you create more efficient production capacity and resource allocation. Here are the top five areas to focus your attention on.
Effective capacity planning starts with effective project planning. Before you can evaluate capacity, you have to have a firm grasp of the project itself and your potentially available resources.
- Define the resource pool with a special focus on high-demand resources
- Define the level of granularity required for planning and reporting accuracy
- Accurately evaluate available operational time for resources
Define the Scope of the Work
Defining the scope of the work will help you decide current capacity, forecast future needs, and see the gaps in your resources. Without a clearly defined project, it is difficult to forecast.
- Clarify high-level project scope
- Communicate consistently with key stakeholders
- Get agreement from key stakeholders
Taking inventory and defining project scope help you set the stage for effective capacity planning. The goal of capacity planning is to create the most efficient way to complete projects. Here are some of the best practices for your strategic planning:
- Start with top-down forecasts
- Estimate resource time at the project or stage level
- Focus on high-demand or critical resources that yield the most value
- Involve team members in the process for better planning and forecasting
- Update plans on a regular timetable and when issues arise
- Avoid assigning excess inventory
As the project gets underway, everyone needs to understand the lines of reporting. You also need to consistently review your capacity plan to ensure you can deliver the necessary resources.
- Clearly define project management roles, including oversight and decision-making authority/responsibility
- Share capacity planning with team members and solicit feedback
- Plan for the unexpected in your production levels and production cycles
Get High-Level Buy-in
For your organization to meet its goals, you also have to get an agreement on capacity planning strategies. For example, do you plan to initiate a lead strategy or lag strategy?
A lead strategy is a more aggressive approach that anticipates demand and ensures additional resources are available. This can increase costs that may not be needed. Conversely, a lag strategy is more conservative and only increases capacity when there is an actual increase in demand. This can lead to a lag time to bring the needed resources online.
Either way, getting buy-in from key stakeholders ahead of time can reduce conflicts and concerns. It can also help you adapt your capacity planning strategy.
Avoid These Common Capacity Planning Mistakes
Your capacity planning strategy also needs to avoid some things that can throw your project planning off. Here are four of the most common capacity planning mistakes.
1. Overestimating Capacity
When you are planning resource deployment, a common mistake is overestimating an employee’s availability. When the amount of time you schedule is shorter than their ability to deliver within that timeframe, it can throw projects off track quickly.
2. Mismatch Between Skills and Projects
Capacity planning goes beyond assigning resources. The most effective planners allocate resources by finding and assigning the best available people with the right skills to the right projects. Part of the match strategy involves cost management. For example, you don’t want to assign a senior engineer at a higher rate to a task that a less expensive engineer could handle at a much lower rate.
3. Not Anticipating Problems
Even the best planning can’t account for all the little things that can pop up. An employee might get sick, material may be delayed in shipment, clients take an extra day or two to approve something or new customer demand. There are thousands of reasons things can get off schedule. Experiencing planners know this and build some flexibility into their plan and run multiple scenarios to be able to adapt when things arise.
4. Isolated Planning
Project planning strategy involved a high degree of focus on individual projects, operations levels, design capacity, production facilities, operations management, and a host of other items. It can be easy to focus on short-term goals and fail to see how resource and capacity planning fit into the larger project portfolio. For example, an increase in demand for a higher priority project can impact other projects. Without evaluating the entire portfolio, you may suddenly find you don’t have the capacity you thought you did or the available resources you need to meet deadline time periods.
Improve Your Capacity Planning
Deploying the best strategies and avoiding the most common mistakes can help you improve your capacity planning. Using Cora’s modern project portfolio management (PPM) solution, you can plan and forecast every aspect of your portfolio and make better investment decisions.
To see how Cora can improve your Capacity Planning and your overall project Management capabilities, watch a demo