Capacity Planning: Strategies, Benefits and Best Practices Jennifer Bridges

Capacity Planning: Strategies, Benefits and Best Practices Jennifer Bridges

Capacity planning is a process that balances the available resources to meet customer demand or project capacity requirements. It is important in project management because it is related to critical project management knowledge areas such as resource management, time management, team management, and work management. There are three capacity planning strategies to help meet demand, cover resource requirements, and increase team members' productivity: lag strategy, lead strategy, and capacity management best practices. Capacity planning is a strategic planning process designed to determine if the organization has the production capacity required to meet demand. It is a mix of the lead and lag capacity planning strategies, and helps project managers monitor actual demand, demand planning forecasts and market trends to adjust capacity accordingly.

Production capacity planning is an important strategic planning process for many reasons, such as reducing costs, preventing stock-outs, reducing production lead time, eliminating excess capacity, and helping with supply chain management. Capacity planning is about supply and demand, while resource planning is about resource allocation.