An approach of capability representation for improving capacity planning

With the growing interest in dealing with the volatile demand fluctuations, there is a renewed interest to enhance responsiveness in capacity planning and, in particular, to address the dynamic changes in product mix. However, with traditional MRP-II and ERP systems, capacity planning assumes that all machines in the work system are either the same or completely different. Similarities among products and resources (such as production equipment) are not a part of the consideration. As a result, inherent flexibility of the system is lost in the planning process. In this paper, we propose a new representation for the capability by characterizing critical capability drivers and their range. With a more refined representation, overlapping and non-overlapping capability regions can be identified, and their inter-relationships with respect to capacity can then be applied for improving the match between the capacity and production orders. Thus, better planning and capacity utilization can be achieved. An example is presented to demonstrate the proposed approach and to compare it with traditional MRP-II planning.