The Ultimate Guide to Capacity Planning
What is Capacity Management?
Capacity management is a delicate balancing act that ensures the availability of sufficient capacity to meet the agreed requirements and needs of a business in a cost-effective manner.
How to Do Capacity Planning
There are three main types of capacity planning strategies: lag, lead, and match. Each strategy has its own advantages and disadvantages, and the best approach for a particular business will depend on its specific circumstances.
Lag Strategy
A lag strategy involves waiting until demand exceeds capacity before taking action. This strategy is relatively low-risk, but it can also lead to lost sales and customer dissatisfaction. A lag strategy is typically used by businesses that are operating in a rapidly changing environment
Lead Strategy
A lead strategy involves increasing capacity before demand exceeds it. This strategy can help to avoid lost sales and customer dissatisfaction, but it can also be more expensive than a lag strategy. A lead strategy is typically used by businesses operating in a stable environment.
Match Strategy
A match strategy involves adjusting capacity to meet demand as closely as possible. This strategy can help to balance the costs and risks of a lag and lead strategy. A match strategy is typically used by businesses that are operating in a dynamic environment.
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