How do you prioritize and allocate resources to address capacity shortfall?

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Capacity shortfall is a situation where the demand for a service or product exceeds the available resources to deliver it. This can lead to poor performance, customer dissatisfaction, lost revenue, and reputational damage. How do you prioritize and allocate resources to address capacity shortfall? Here are some tips to help you plan and manage your capacity effectively.

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Jerome Pritchett

Veteran | Trainer | Problem Solver | Team Builder | People Empowerment | Cross-Functional Management | Middle…

1 Assess your current capacity

The first step is to measure and analyze your current capacity, which is the maximum amount of work or output that your resources can produce under normal conditions. You need to identify the key factors that affect your capacity, such as staff, equipment, space, materials, time, and quality. You also need to monitor and track the actual utilization of your resources, which is the percentage of your capacity that is being used. This will help you identify any gaps, bottlenecks, or inefficiencies in your processes.

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Jerome Pritchett

Veteran | Trainer | Problem Solver | Team Builder | People Empowerment | Cross-Functional Management | Middle Management Playbook (Training)
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Agreed. Any time you can see a normal versus abnormal condition quickly, you position yourself to win. This part is critical, but incomplete if you do not follow through with the work. Gaps show up due to a nonstandard situation that occurs. When you study the “Why” it happens, you open yourself to discover the root cause. This keeps your capacity planning alive and healthy.

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2 Forecast your future demand

The next step is to estimate and anticipate your future demand, which is the amount of work or output that your customers or stakeholders expect or require from you. You need to consider both the quantity and the quality of your demand, as well as any seasonal, cyclical, or unpredictable variations. You can use various methods to forecast your demand, such as historical data, market research, customer feedback, or expert opinion. You also need to account for any risks or uncertainties that may affect your demand, such as changes in customer preferences, competitor actions, or external events.

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Jerome Pritchett

Veteran | Trainer | Problem Solver | Team Builder | People Empowerment | Cross-Functional Management | Middle Management Playbook (Training)
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I have not done much forecasting. However, I believe the stronger the organization is in this area, the bolder they can be in their decisions and assessments in regards to making strategic moves in the market. Forecasting is a large muscle that demands to be exercised with the right technique and drive. It grows with the different demands from the market and the organization’s capability.

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3 Prioritize your goals and requirements

The third step is to prioritize your goals and requirements, which are the outcomes or standards that you want or need to achieve with your resources. You need to align your goals and requirements with your organizational strategy, vision, and values. You also need to balance the needs and expectations of your different customers or stakeholders, such as internal departments, external partners, or end users. You can use various criteria to prioritize your goals and requirements, such as urgency, importance, feasibility, or impact.

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John Yokley, CSCP

Principal Consultant | Certified Supply Chain Professional (CSCP)
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This is the critical element. Why? Because this is the one area that is fully in control by the organization. Forecasts are inherently inaccurate on a discreet item level. Capacity can be impacted by weather, faulty component supplier or an operator having a bad day. But prioritizing your customer fulfillment base is entirely owned within the organization's four walls. And the successful organizations perform this exercise and, more importantly, insure it is understood within all levels of their organization, prior to a capacity shortfall event.

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4 Allocate your resources accordingly

The fourth step is to allocate your resources accordingly, which is the process of assigning or distributing your resources to meet your demand and achieve your goals and requirements. You need to optimize the use of your existing resources, such as by improving their efficiency, productivity, or quality. You also need to acquire or adjust your resources as needed, such as by hiring or training staff, upgrading or replacing equipment, expanding or relocating space, or sourcing or managing materials.

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5 Monitor and evaluate your results

The fifth step is to monitor and evaluate your results, which is the process of measuring and reviewing your performance and outcomes against your demand and goals and requirements. You need to collect and analyze data and feedback from your resources, customers, and stakeholders. You also need to identify and report any issues, problems, or opportunities for improvement. You need to take corrective or preventive actions as necessary, such as by resolving or escalating issues, adjusting or reallocating resources, or revising or updating your goals and requirements.

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6 Communicate and collaborate with your team

The sixth step is to communicate and collaborate with your team, which is the process of sharing and exchanging information and ideas with your staff, colleagues, and managers. You need to communicate and collaborate with your team throughout the capacity planning process, from assessing your current capacity to evaluating your results. You need to inform and involve your team in your decisions and actions, as well as listen and respond to their feedback and suggestions. You need to motivate and empower your team to perform and deliver their best.

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Jerome Pritchett

Veteran | Trainer | Problem Solver | Team Builder | People Empowerment | Cross-Functional Management | Middle Management Playbook (Training)
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Absolutely! There is a wealth in your team. Each person has value needed for the opportunity at hand. The leader is a collector. He/she is collecting data from a variety of resources. The team is one of these critical parts. They a large supplier who through relationship will share their inputs that will help the leader and themselves to make the correct decisions for the organization.

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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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Ian CE Baldwin

RETIRED Mainframe Performance & Capacity Consultant
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You have missed a very crucial step… 0. Consult your business & financial stakeholders and determine what THEY want to resolve, sacrifice or can afford to do. This is because in many cases the capacity shortfall is temporary and probably they just want to ride it out, or there is no money to buy new capacity so they have to decide what work they need you to prioritise or sacrifice so mitigate the shortfall. Please note: IMHO almost all the recent capacity items have just dealt with the capacity planning aspects and have forgotten that most capacity planning is DEPENDENT on what the STAKEHOLDERS want and can afford. Basically the articles assume that capacity planning lives in isolation, when clearly it does not.

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How do you prioritize and allocate resources to address capacity shortfall?

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1 Assess your current capacity

2 Forecast your future demand

3 Prioritize your goals and requirements

4 Allocate your resources accordingly

5 Monitor and evaluate your results

6 Communicate and collaborate with your team

7 Here’s what else to consider

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