Mastering Production Capacity Planning and Resource Utilization
What is our capacity utilization?
A few years ago, production leaders did not bother to ask this question. Even if they did, they would not get a precise or satisfactory response. In the old days of abundant revenue opportunities, prioritizing scaling and expansion over operational efficiency made sound business sense.
Why is capacity utilization important today?
Amid heightened competition and pressure on revenues and margins, operational efficiency has become critical to maintaining the company's financial health. The high cost of production of high-quality content makes it imperative that content is produced efficiently and cost-effectively. Effective capacity resource planning and tracking can help production teams to:
Better align resources with demand and strategic goals in response to the market’s ever-changing demands
Identify wastages, and potential bottlenecks, while making sure you are not over-extending existing resources
Improve capacity planning by analyzing historical data and comparing expected time vs. actual time taken to complete a job
More efficiently schedule new projects in the pipeline to fill out available capacity
Adjust pricing levels based on demand and capacity.
What challenges are encountered in actively managing resource utilization?
The greatest challenge is that the data needed for doing such analytics is either missing or not easily available or captured for several reasons:
Lack of the right data collection tools that can accurately track capacity utilization
Diverse operations with fragmented or siloed data systems: Different teams or even members of the same team may use different project management and resource scheduling tools. Info may be spread in multiple places.
Lack of unified data model: when teams continue to use legacy systems that are not designed for comprehensive data tracking or easy integration with newer digital tools. This can lead to a lack of visibility into how resources are used across different teams or projects, making it difficult to optimize utilization.
What to look for in a resource management tool?
Several tools are available to help you with capacity planning and predictive analytics. In your evaluation, the most important question to ask is whether it is useful for a production team and which can handle things like:
capture production data generated from dynamic scheduling, task management, and time-tracking tools, consolidate data from multiple places, and provide real-time insights and predictive analytics to help take corrective action
define and measure capacity not just for talent but also for equipment and facility
set capacity metrics by defining labor rules for daily/weekly working hours, holidays, and leave
handle multiple time basis units such as hour, day, or custom, e.g., Day10 with lunch break
generate reports on total available, utilized, and balanced capacity
visually locate periods of high and low utilization, show trouble spots, and make dynamic adjustments in resource schedules to achieve balance
How Teamium addresses these requirements?
Because Teamium is a production management and resource scheduling tool purpose-built for production, it has the data model to accurately capture the capacity utilization data needed for measuring, reporting, and analytics, including:
Collecting and aggregating data from multiple places – from project schedules, task completion time, and actualized time filled from time sheets if implemented
Setting optimal range: for talent, a 100% utilization is not ideal or practical, can lead to stress and burn-out, and can hurt productivity and quality. A 70-75% range ensures no one is over- or under-worked.
For equipment, a 90-95% range is reasonable, leaving room for some downtime for maintenance.
Teamium also calculates daily, weekly, or monthly available, utilized, and balance capacity.
Timesheets for recording used capacity for actual vs estimated comparison
Combined with it’s powerful financial analytics, Teamium gives you deep and accurate insights into your KPIs and helps you make strategic business decisions for cost-optimized capacity planning.
#ProductionManagement #CapacityPlanning #ResourceUtilization #Teamium #OperationalEfficiency
