Fed up with lost productivity? Ready to get things under control?
Every manufacturer knows the importance of proper resource allocation. Maximizing the output of equipment, workforce, and materials can lead to:
- Increased output
- Lowered costs
- Increased profit
The issue is that very few manufacturers even come close to reaching their full potential. As reported by the Federal Reserve, the current manufacturing capacity utilization rate is 76.8 percent, well below the historical long-run average.
The good news is that modern manufacturing capacity planning software is finally allowing manufacturers to change that. Software solutions can assist in resource forecasting, workload balancing, and smarter resource allocation decisions.
And here’s the best part…
Capacity planning software can make the difference between a flailing operation and a successful one.
Post Contents
What’s Inside:
- The Definition of Manufacturing Capacity Planning Software
- The Importance of Resource Allocation for Manufacturers
- The Main Benefits of Capacity Planning Tools
- How to Choose the Right Software
- A Simple Action Plan for Better Resource Allocation
The Definition of Manufacturing Capacity Planning Software
Manufacturing capacity planning software is a set of tools designed to help manufacturers understand and optimize the capacity of their operation. In simpler words, this software defines what is available and how much they can produce.
Manufacturing capacity planning software or capacity planning software in manufacturing looks at all the production resources from raw materials to equipment and workers and calculates the output given those restraints.
In more concrete terms, the process works like this. The software tool takes all the information about available equipment, production lines, and production schedules and works out how much the factory can really produce within a set timeframe.
The process usually includes the following features:
- Demand forecasting: predict what and when a consumer will need
- Resource scheduling: assign the workforce and equipment
- Workload balancing: ensure that resources are optimally loaded
- Bottleneck identification: locate capacity issues before they become an actual problem
Resource Allocation Isn’t Just a Necessity for Manufacturers. In Fact, It’s Critical for Their Business.
The actual tools are good enough these days to automate the process and do the job on their own with no human interaction. The old methods of manual tables and endless spreadsheets are a thing of the past.
The Importance of Resource Allocation for Manufacturers
And here’s something that most manufacturers don’t even think about…
Misallocation of resources is very expensive. Idle equipment and unskilled workers doing low-level tasks all contribute to reduced productivity.
And it’s not just time that is wasted.
Misallocated resources lead to missed deadlines, dissatisfied customers, and, of course, no money coming in. In today’s competitive environment, manufacturers cannot afford to lose money in such a way.
The environment for manufacturing has also changed in recent years. Supply chains have become more complex, customers’ demands have become much more volatile, and lead times have shortened significantly.
All these factors combined have given manufacturers little to no time and option to misallocate their resources.
This is why new tools have become necessary to ensure capacity planning and proper resource allocation, and manual planning methods that have been working ten years ago cannot be used anymore.
Capacity planning tools can help.
The Main Benefits of Capacity Planning Tools
Now the question is what they can actually do for a manufacturing operation?
Here’s a breakdown of the main advantages of capacity planning tools for manufacturers.
Smarter Demand Forecasting
The good capacity planning tools use historical data and market trends to make better-informed demand predictions. This helps to plan for busy periods and avoid overproduction in lulls.
So no more being surprised by unanticipated spikes and no more guessing what a consumer will need and when.
Better Equipment Utilization
Idle equipment is one of the most wasteful aspects of the manufacturing process. Capacity planning tools allow to track machine availability and schedule production runs to minimize downtime.
As a result of better equipment utilization, manufacturers get:
- Less downtime
- More production per machine
- Longer equipment life
Optimized Workforce Scheduling
Skilled workers should work on high-skilled work and during their most productive hours. Capacity planning software can make sure that this actually happens.
As a result, no more cases of trained machine operators being wasted on low-skilled jobs and important tasks piling up.
Real-Time Visibility
Modern capacity planning tools include dashboards that provide real-time visibility of the production floor. This way, the managers can immediately see when a problem arises and, if necessary, change things in real-time.
The kind of visibility no manufacturer had when using older planning methods.
Reduced Waste
If resources are allocated properly, less waste is generated. Less material will be scrapped, fewer products will need rework, and energy costs will go down as machines won’t run unnecessarily.
According to 9cv9 research, around 58 percent of manufacturers have adopted capacity planning software to optimize their production needs and minimize downtime and the number is still growing.
All these software tools have the same goal of ensuring better resource allocation and manufacturers are well aware of the benefits that such a change can bring.
How to Choose the Right Software
The problem is that not all capacity planning software is equal, and in some cases, the wrong tool can become worse than no tool at all.
What to look for when choosing the best capacity planning tools:
Integration capabilities. The tool has to integrate with existing systems, such as ERP and inventory management, among others. The data should be able to flow between systems without manual input and export.
Ease of use. Software that is too complicated and which nobody will ever understand how to use will bring nothing to the operation. Easy and intuitive interfaces that the team will actually use are the number one priority when it comes to software solutions.
Scalability. A good software solution has to be scalable and fit the business no matter how much it grows. A software that works for a small operation now will not work when the production grows tenfold.
Real-time data. Static reports that are generated at the end of the day are already out of date when printed. A proper software solution has to give live updates so that decisions can be made based on up-to-date information.
Customization. The last but not least important thing is customization. The fact of the matter is that no two manufacturing operations are the same. A software solution that claims to fit all has a very low chance of really being a fit for a specific business.
5-Step Action Plan for Better Resource Allocation
Ready to try? Here’s a simple action plan to move things forward.
The very first step has to be an audit of the current state of the resource allocation process in the company. This is the step when waste is identified. Bottlenecks, idle equipment, and scheduling issues need to be found.
The next step is to set clear and tangible goals for the resource allocation process. The goals have to be specific and clearly measurable. More output? Lowered costs? Quicker turnaround time? Set a clear goal and go for it.
The next step is evaluation of different software solutions and shortlisting of the best ones. Most software vendors offer trial periods or at least demo versions of their solutions.
The final step of this plan has to be team training. The most advanced software in the world will not help if no one on the team knows how to use it. Invest time and energy in proper training and continued support.
Of course, it’s highly not recommended to try to change the whole thing in one go. Start with a small change, evaluate the outcome, and only then change something more.
Bringing It All Together
With modern capacity planning software, manufacturers have an opportunity to take full control over resource allocation and planning for production. The software gives them visibility and control over the process which is necessary to truly maximize productivity while keeping waste at a minimum.
Manufacturers who take advantage of this opportunity will have a serious advantage over those who do not.
Resource allocation is a controllable factor, and with the right tools and approach, it can even become a source of competitive advantage.
Tools are there. Benefits have been proven. The only thing left is to decide whether to act now or lag behind.
Better resource allocation starts with better planning. And better planning starts with the right software.