If you want to achieve consistent high on time delivery levels, it is essential that you manage your capacity. Managing the queue and resource levels is a key part of how you don’t over commit to your customers and disappoint them. Not over committing is a great strategy for improving your on time delivery performance.
At this point I want to stress that this isn’t about taking the easy route; lowering your volumes and using the notion of capacity as an excuse not to maximise your output. This is all about managing customer expectations and hitting high levels of on time delivery.
Do you have bottlenecks?
When I talk about capacity management, this can come in various forms.
This might mean a single bottleneck constraint that you need to protect.
This might be a view across your business, to establish what is overloaded or underloaded.
This might be a handful of key areas that are harder to flex resource for.
Whatever shape your business comes in, determining what is meaningful from a capacity measurement perspective is job number one.
What is the workload?
The next step is to understand how big the backlog / queue / forward load is for each area of the business that you need to manage.
Gathering the data might be cumbersome the first time around but it needs to be done. Find where the information is kept and if it doesn’t exist, create it.
Getting a true snapshot of what you are facing, getting a dose of reality, is needed to establish what is the right approach for your business to succeed without blood, sweat and tears.
What is your capacity model?
Knowing how much resource you have is only one factor for determining your capacity ‘model’. By model, I mean the way that you calculate how much available capacity is available. Let me give you one quick example.
Let’s say that you have a team of three people. Each person works eight hours per day. Logically this would give you twenty four hours of available time per working day (8 x 3 = 24).
But, real life isn’t like this and there are some considerations that would make this realistic. To keep this example short, we’ll use technical queries. Every time there is a query, this is time taken away from delivering the day job.
If this took up 10% of the working day, that’s 2.4 hours you have lost. Start thinking about holidays, sickness, training, team meetings and you’ll start to create a realistic view of how much time is available to consume the queue of work.
In short, don’t plan on 100% of the available time being used on the queue of work. The same goes for machines, if it isn’t people. Maintenance, breakdowns etc… you get the idea.
What are your options?
Once you have determined a realistic way to determine your capacity, you may wish to think through the options you can exercise if the queue gets too long. As I recommend to all my clients, preparing your responses in advance is better than trying to do it when it’s crunch time.
When your queue gets to a certain length (usually too long), what options make sense?
Putting on extra shifts? Hiring additional staff? Saying no to additional work? Delaying start dates?
You’ll know what works best for your business and your customer base. Thinking up answers in advance let’s you create a playbook for your capacity management.
Creating a routine
Reviewing your capacity isn’t something I recommend you leave until it is too late…
When customers are screaming at you is the wrong time. Checking periodically is more sensible. For some this is daily, for others it is monthly.
Determine what frequency makes sense to you and who needs to review the data.
Managing and monitoring
Once you have your options for managing the queue, a review frequency and a team, you need to start managing and monitoring.
Doing this on a regular basis allows you to make decisions before disaster occurs.
Regulating your resources, or the way that you accept work into the queues in your business can help you to more effectively deliver on time and manage the expectations of your customers.
There is lot more to discuss on the topic of capacity management but there are a few points that I want you take away from this article:
- Know what areas of the business you need to manage the capacity of more closely.
- Determine what is queued up against them.
- Create a model of the area in question to figure out how long their queues are.
- Develop options on how to regulate the queue length.
- Agree how often you are going to review the queue length and who needs to take part.
- Execute the routine, and respond to the queue length appropriately.
Guard your capacity and manage your customer expectations. It can work wonders when it comes to on time delivery performance.