How do you analyze capacity for multiple products?

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Capacity planning is the process of estimating and managing the resources needed to meet the demand for your products or services. It involves analyzing the current and projected capacity, demand, and utilization of your resources, such as staff, equipment, materials, space, and time. Capacity planning helps you optimize your efficiency, quality, and profitability, as well as avoid overloading or underutilizing your resources.

However, capacity planning can be challenging when you have multiple products that share the same or different resources, have varying demand patterns, and compete for priority. How do you analyze capacity for multiple products and balance their needs and constraints? Here are some steps you can follow to conduct a multi-product capacity analysis.

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Sam Madrid

Executive Leader | Supply Chain Expertise | Operations Execution

1 Identify your products

The first step is to identify your products and their characteristics, such as features, functions, benefits, target markets, and life cycles. You should also define the units of measure for your products, such as units, hours, transactions, or customers. This will help you compare and aggregate the demand and capacity for different products.

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Sam Madrid

Executive Leader | Supply Chain Expertise | Operations Execution
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I think a good thing to start with is what you are trying to accomplish through the analysis. Are you trying to optimize gross margin, top line sales, etc. Making sure you understand what your stakeholders are looking for is a key first step that will likely steer the tools and processes that are needed.

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2 Estimate the demand

The next step is to estimate the demand for each product over a given time period, such as a month, a quarter, or a year. You can use historical data, market research, sales forecasts, customer feedback, or other methods to project the demand for each product. You should also consider the variability and uncertainty of the demand, such as seasonal fluctuations, trends, or unexpected events.

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3 Assess the capacity

The third step is to assess the capacity of your resources for each product. You should identify the resources that are required or shared by each product, such as staff, equipment, materials, space, or time. You should also determine the capacity of each resource, such as the number, availability, productivity, or efficiency of your resources. You should also consider the constraints and limitations of your resources, such as technical, financial, legal, or environmental factors.

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4 Calculate the utilization

The fourth step is to calculate the utilization of your resources for each product. Utilization is the ratio of the demand to the capacity of a resource. It indicates how much of a resource is used or consumed by a product. You can use formulas, spreadsheets, or software tools to calculate the utilization of your resources for each product. You should also calculate the total utilization of your resources across all products.

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5 Evaluate the performance

The fifth step is to evaluate the performance of your capacity planning for each product. You should compare the utilization of your resources to the desired or optimal level of utilization. You should also measure the outcomes and impacts of your capacity planning, such as the quality, customer satisfaction, revenue, cost, or profit of each product. You should also identify the gaps, issues, or risks in your capacity planning, such as overcapacity, undercapacity, bottlenecks, or trade-offs.

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6 Adjust and optimize

The final step is to adjust and optimize your capacity planning for each product. You should review and update your demand and capacity estimates based on the actual data and feedback. You should also implement strategies and actions to improve your capacity planning, such as prioritizing, scheduling, allocating, outsourcing, or scaling your resources. You should also monitor and control your capacity planning, such as tracking, reporting, auditing, or correcting your performance.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Frida Bengco

Lean Six Sigma Black Belt/ Industrial Engineer/ Process Engineer/ Production & Raw Material Planner/ Training Coordinator
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When you analyze the capacity it should include all the downtime per process to less it in Total available time and that includes the break time, machine downtime (set-up/ change over & machine trouble), fatigue (% man efficiency) & quality (Yield loss). It would be great to use the OEE to compute the capacity. You need to identify also your demand and the timing of your order. Kanban system will be a great in ordering system when it comes to multiple orders. In this system you will know what is needed, how much and when is needed to avoid delays and over production. Line balancing needs to consider also to maximize each capacity for each machine or operator.

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How do you analyze capacity for multiple products?

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1 Identify your products

2 Estimate the demand

3 Assess the capacity

4 Calculate the utilization

5 Evaluate the performance

6 Adjust and optimize

7 Here’s what else to consider

Capacity Planning

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