A demand and capacity plan is a plan dedicated to meeting the changing market demands for a product. It should consider the number of resources (capacity) available and those that you need to obtain. Here are the benefits of having an effective demand and capacity plan:
Increased production line efficiency
A production line can require complex resource management, with a strategic capacity plan, you can identify production processes that are cost-efficient yet effective to perform. This involves attaining the required supplies and facilities and laying out well-thought-out production schedules. Producing a certain amount of product as per the demand helps meeting demands promptly and prevents waste.
Additionally, you can log staff activity and choose who is best suited for the task at hand. It also highlights what expertise and skills you currently have and may not have in the business. With such a plan, you can make detailed schedules for all workers including freelancers and contractors among others; making work schedules well-coordinated and improves manufacturing efficiency.
High demand times require an adequate amount of resources. Proper demand and capacity planning can forecast such times which helps in developing budgets and efficient work plans. Moreover, it reduces staff burnout which in turn motivates them.
Some businesses undergo seasons during which demand levels are significantly above or below average. Knowing what resources are available will allow planners to plan for seasonal peaks better.
Improve customer satisfaction levels
Reacting promptly to the ever-changing demands of the market keeps customers happy. Knowing that they can get quality products when they need it is a sure way to win them over and keep ahead of competitors.
Customers can be verbal with their positive or negative experience with businesses. Satisfactory experiences generate great reviews and recommendations can contribute to building your enterprise’s reputation. Referrals or recommendations can be valuable as it can help you grow your customer base and bring back rewarding financial returns.
What role does an MRP system play in all of these?
Taking up demand and capacity planning manually can be time-consuming and inefficient. By investing in Materials Requirement Planning (MRP) software can make it a whole lot easier. MRPs are designed to take inventory of the material and equipment at hand, identifying what’s missing and how to obtain it.
The best part about it is that it doesn’t have to be a standalone system; an MRP system can be integrated to be part of your ERP system. That means you get to monitor all the main operative functions of your enterprise all in one unified system. The ERP shows business progress in real-time thereby helping you make timely decisions.