Don’t Make Another Capital Equipment Purchase Yet: Evaluate Your Capacity Planning

Introduction

If you are looking to upgrade or replace an ERP, one of the biggest factors to consider is if a system offers capacity planning that suits your business’s needs. Your ERP should allow you to understand and build your manufacturing capacity as well as plan for the future. After all, capacity planning solidifies organizations, saves money and increases output.

Finding Your Realistic Production Capacity

Capacity planning manufacturing is a method of calculating the realistic capacity (how much you can produce) of your production lines to keep up with forecasted demand (Katana). It’s important to make sure that the capacity numbers you are using are realistic; sure, your machines may be able to work overtime for a while, but continual overuse will cause them to break down, resulting in unnecessary downtime and thousands of dollars in repairs. Finding your realistic capacity means factoring in the limits of your equipment, maintenance time, staffing needs, training time, and other considerations to minimize what are known as the Six Big Losses. 

The Six Big Losses are:

  • Equipment Failure, Setup and Adjustments
  • Idling and Minor Stops
  • Reduced Speed
  • Process Defects
  • Reduced Yield

By inputting data about your organization into your ERP (the number of machines, workers, facilities, etc.), your system will be able to find your realistic capacity to optimize your production lines. Often, Datix clients find additional, untapped capacity with the implementation of a new ERP. Tier 3 and 4 ERP systems may offer some form of capacity planning, but it often does not consider many key factors to identify that untapped capacity. Companies who implement new ERPs with full capacity planning functionality find themselves saving significant capital expenditures by not having to purchase additional manufacturing equipment, and instead, get more output from what they already own.

Building Capacity and Flexibility

When your ERP details your manufacturing capacity, it is likely that certain “weak spots” in your process will stand out. Fixing these inefficiencies will strengthen your organization and build your capacity levels to new heights. For instance, you may realize that one shift is consistently slower than the others, which can be solved by offering more training and reiterating expectations. Because your capacity and supply chains change over time, your ERP needs to be able to adapt its forecasting to the most up-to-date information. Fortunately, production, inventory and supply chain data should already be inputted into your ERP as part of your business practices, so the system will always be ready to update its estimates to meet customer demand.

Scheduling Efficiently Increases Output

With capacity planning, you can schedule jobs to get the most out of your manufacturing capacity. Capacity planning allows you to understand what operations (welding, cutting, stamping, etc.) can be done in batches for different jobs at the same time for maximum efficiency. For example, let’s imagine you have a critical job that requires using a thermal furnace during the injection molding process. Assuming that there is space in the oven, you can use the furnace for other jobs at the same time if you coordinate your scheduling. At Datix, we have seen output increase significantly when our clients start capacity planning with their ERP. One customer had been scheduling jobs manually on spreadsheets, which meant conducting a four-hour meeting every week to map out their schedule. After switching to an ERP that had scheduling capability, their production levels grew immensely as they were able to produce more products in less time. Learn how Datix helps our clients solve their biggest challenges and find the right ERP solution for their organization.

Wrap Up

When choosing an ERP, capacity planning is one of the key features manufacturers need to look for to optimize their setup. With 25 years of software experience, Datix brings a client-centric focus to finding and setting up our tailored ERP solutions.

Find out more in our Ultimate CRM and ERP Implementation Plan eBook

About Datix

When it comes to upgrading or replacing an ERP system, Datix can find you the right solution for your business. After gathering an in-depth understanding of your operation, our team of experts will find the right ERP implementation to meet your organization’s needs now and as you grow in the future.

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