Introduction To Capacity Planning in 6 Easy Points

Ajay Ohri


Every successful company or any firm requires a management system to manage the whole and do things accordingly to make progress. Good management starts from every individual itself. Each system has its own capacity to do work. And here comes the capacity planning for the execution of the work within the given resources effectively and efficiently.

We can say that capacity planning is any organization needs the process or method of determining the capacity of the production to fulfill the varying demands for their respective product. In short, we can say that – to plan the limited resources efficiently for achieving the final product is called capacity planning. The capacity is the upper limit of the load (number of units) that an operating system (machine unit or worker) can handle.

The goal of capacity management is simple – to meet the current level and the requirements’ future level at a very minimal manner of wastage.

To achieve the goal, the basic three questions have appeared for the planning of the capacity. That are as follows:

  • ‘WHAT’ kind of capacity is needed?
  • ‘HOW’ much the capacity is needed?
  • ‘WHEN’ the capacity is needed?

In this article let us look at:

  1. Capacity Planning classification
  2. Requirements
  3. Factors affecting Capacity Planning
  4. Steps
  5. Advantages
  6. Capacity Planning and integration

1. Capacity planning classification

Depending upon the time consent, Capacity planning is classified into mainly three categories.

  • Long term capacity.

In the long term capacity, the investment is high as compared to the others, and time is also maximum.

The long term capacity is based on the other co-related capacities too.

  • Medium-term capacity.

In the medium range capacity, the investment is less than that of long-term capacity, and time is also less.

The time is generally of some 2 or 4 years. And the medium-term capacity is dependent on strategic capacity planning.

  • Short term capacity.

Here in the short-term capacity planning, the time period is very less. The organisation’s strategic capacity planning is set on the day-to-day basis or for a couple of days.

2. Requirements

The requirements for capacity planning area as follows:

  • material
  • machine
  • workers 

In short, we can say that these resources are the pillars of capacity planning.

Analyzing the current capacity and planning for the future too. They are also important factors.

 3. Factors affecting capacity planning

There are various aspects to which capacity planning depends. For effective planning the factors like a production facility, design, layout, product line, production technology, the structure of the operation, which includes the scheduling and the quality of the product etc., and external policies like safety regulations are very important. Based on these, the capacity planning is depending. Any misconduct in these sectors affects it. These are the factors affecting capacity planning. 

Types based on Resources.

Based on the resources, capacity planning is divided into major three types. These three types make sure about the availability of the resources properly so that it will easy to plan for a day, week, month, year in advance. Thus, it makes sure that all three- long term, medium term, the short term has enough resources. these three types areas:

  • Product capacity planning.

The function of this planning ensures that the organisation has a good number of products or ingredients for their deliverables. For example-For a café, this would-be raw food products, seating area, and other essentials.

  • Workforce capacity planning

Any task is impossible without its team member. The function of this planning is to make sure that the organization has a proper number of team members.

Also, enough time to accomplished the task. This will also help in future recruitment for new members of the organization or company.

  • Tool capacity planning

The purpose of this tool is to make sure that the organization have enough tools and equipment.

4. Steps

  • Measure – to measure the capacity of the resources.
  • Analyze – analyze the information from the measurement. 
  • Formulate -taking all the information and formulate a plan.

5. Advantages

  • Low investment at a high profit.
  • Minimize the wastage.
  • Manage inventory.
  • Development of new product.

6. Capacity planning and integration

If the user has already set up 2.0 integration and then the user enables the capacity planning, then the user needs to go back and update the estimate fields. And resync the data with the tool.

  • Estimate capacity by the initiative.

The user can estimate the capacity at three levels. At the highest level, the user can apply an estimate to an initiative by filling out the estimate field of other initiatives.

  • Estimate capacity by release.

When the user enables this feature, the planning bar displays the total capacity, completed work, remaining work and the status of the user’s capacity.

  • Estimate capacity by features and requirements.

This shows the important features and requirement. As the bar activated, it calculates the estimated requirement to complete the project.

  • Log time worked.

It is the total time required to complete one project. It keeps track of all time spent on each section.

  • Use the capacity report.

It is a sheet structure to keeprecord the dates including the start date, due date and estimates.


Capacity planning is a helpful tool to achieve the output very effectively and efficiently and create a healthy environment for better outputs.

  • It ultimately helps to minimize the resource’s cost.
  • It ensures the availability of resources.
  • And all this leads to a healthy production cycle.

Interested to learn all about Product Management from the best minds in the industry? Check out our Product Management Certification. This 6-month-long program takes place online through live instructor-led sessions. It is the only program in India that offers the ‘Bring Your Own Product (BYOP)’ feature so that learners can build their product idea into a full-blown product, and go through an entire Product Development lifecycle. Not only this, but this is the only program in India with a curriculum that conforms to the 5i Framework. Post completion, learners receive a joint certification from the Indian Institute of Management, Indore, and Jigsaw Academy. 


Related Articles

Please wait while your application is being created.
Request Callback