Limitations Of Capacity Planning

Capacity planning is the strategy that an organization uses to forecast the production levels that the organization should have to ensure that the demand of the goods or services in the market can be catered to.

Capacity Planning is basically the efficient use of the available resources. It is applicable in every aspect of our daily life. For instance, Capacity Planning in any organization involves the efficient utilisation of the labour force in tandem with the other resources like time, raw materials, etc to achieve with the goal of the organization. The organization needs to determine its capacity requirements before it starts it operations. Like the skills needed by the workforce, no of workforce required, etc.

Every business, whether it

It provides the necessary infrastructure like the hardware, software, etc to provide Internet connections to individuals or companies. Cisco products are used in LAN, Wan and other Internet connections. Out of these, WAN bandwidth is quite expensive. Now, the WAN circuits running at 60 to 80 % of the capacity had the potential to decrease user productivity. In the early 2000’s, the WAN Utilization began to rise and thus decreasing user productivity. But to determine whether additional capacity is needed or not, the company needs to determine the type of traffic that is using the network. New features like Internet calls, voice over Internet, video streaming, emails were the drivers of bandwidth utilization. At this point, the company realized that they were lacking capacity planning. They realized that capacity planning is needed at the circuit level.

Steps for Capacity Planning

The pre-requirement of capacity planning is to understand the operations of the organization/ business properly. Successful capacity planning involves the following steps:

1. Determination of the level of Service requirements: It involves the classification of the work done by the processes involved in the organization and trying to match the end consumers needs, wants, demands and

Also, a surplus capacity can turn out to be expensive for the company. It can cause decline in sales, increase cases of customer service problems, etc. So efforts should be immediately taken to solve the disparity between required capacity and surplus capacity.

It is difficult to create perfectly balanced material and capacity plans. For instance, if the company’s core competency is flexibility, then the company should maintain surplus capacity. Similarly, if it is a service company, the capacity planning should be done keeping in mind factors like inability to store services, demand volatility, etc.

Apart from this, another problem with capacity planning is that the analysts are much of the time busy with day to day operations of the organizations and they do not spend the necessary time on capacity planning. Also the strategic decisions taken by the organization change very frequently, in such a case, capacity planning becomes