Capacity planning. Basic principles

Capacity planning is often used to quickly solve occupancy problems. However, the purpose of capacity planning is to achieve acceptable and agreed service levels to your customers in a cost-effective manner.

This definition immediately indicates what the first step should be before you actually start planning. Determining your service levels. Before you can determine what are acceptable and cost-effective service levels, it is a good idea to first understand what Workload means. Workload ultimately determines whether you can achieve the requested levels.

Workload

An exact definition of workload does not exist, but the most accepted definition is:

Relationship between a group or individual operator, their capabilities and the requirements of the task to be performed. Workload modeling is the analytical technique used to measure and predict the workload. The main objective of assessing and predicting the workload is to achieve an even distribution, controllable workload and prevent over or underload.

It is then important to determine who does what and how it should be carried out and whether this is possible. It is advisable to analyze the workload properly from a business perspective. It therefore gives you better insight into this in your future planning, when shifts occur. The most commonly used method to determine workload is the so-called manload.

The manload describes the task of the lowest level performers. The major advantage of this level of detail is that it reveals substantive differences between equivalent functions. A good work analysis is then also possible, so that any inefficiencies can be detected.

In the end, a manload can be compiled for each function, department, enabling a full occupancy analysis. The Correct number of Fte can be determined on this basis.

Service levels

A service level agreement is an agreement between the service provider and the consumer of a service. The service level agreement is often defined from the user’s perspective, usually in terms of response time, reliability or quality. Using workloads aids in the process of developing service level agreement, because workload can be used to measure performance in a way that makes sense for customers / users.
Ideally, service level requirements are ultimately determined by business requirements. Often they are based on past experiences. This creates requirements that do not match your workload and the capabilities of your organization. Over – or under performance then lurks. This can be prevented to fully calculate your current capacity based on the workload that you have determined.

Current capacities.

What is the right capacity? Is that the highest possible, such as the maximum capacity of a machine, the average or best performance.

If you are going to work with the maximum capacity, you need to determine exactly what this means. Max cap = technically maximum capacity – / – unavoidable losses. Those unavoidable losses include necessary maintenance, for example. You cannot count on that. In addition, there are the necessary losses, which may not be desirable, but can be prevented. Think of sub-optimizations in your line. They decrease your capacity, but cannot be rectified immediately. That is why the consultancy uses 3 concepts of capacity: the technical maximum capacity, the standard capacity and the planning capacity. The last is what you should use in your daily planning.

You can best determine the planning capacity based on your workload and determine the best demonstrated performance per task. This means that you have to analyze the performance data over a longer period of time. Where are the peaks and troughs and what was the reason for that. If certain peaks concerned exceptional situations, these are not included. You will then receive a corrected optimum for a task or department. This optimum is higher than if you take an arithmetic average of the total period analyzed. It is about Best Demonstrated performance. This means that the service level standards are feasible on the one hand, but still challenging.

Plans for the future

The most difficult thing about planning is predicting the future. How reliable are the issued Sales figures, are the departments able to meet the agreed standards and are the suppliers reliable enough?
At a strategic level it is necessary to agree on what growth is expected and what growth is also possible. After all, many financial-strategic decisions underlie this. If at high level the limits of growth and difference