Most organizations are equipped with high-performance software integrating classic three-level Supply Chain planning methods (Sales & Operations Planning (S&OP), Master Production Schedule (MPS), and scheduling) that have proven their worth. However, EURODECISION has recently worked with several production managers facing operational challenges.

Why is capacity planning such a headache for production managers?

We have been approached by several clients struggling with production issues not addressed by standard tools (S&OP is too high-level as it deals with product families, while the weekly production plan lacks sufficient visibility):

  • I face strong demand seasonality, but my production capacity is limited. How can I plan production while managing SKU-level inventory efficiently?
  • I’m hitting production capacity limits and can’t fulfill all orders. How do I decide which products to manufacture to maximize profit margins?
  • How can I maintain production agility when unexpected events (export orders, promotions, etc.) tie up resources for weeks without disrupting standard orders?
  • My production capacity is temporarily reduced. How can I minimize stockout penalties for key products in my planning?

What expertise can EURODECISION consultants bring to capacity planning?

EURODECISION has developed a dedicated capacity planning model, based on applied mathematics, bridging the gap between MPS and scheduling:

EURODECISION's capacity planning model

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Our models are built at the SKU level, with a planning horizon of up to 52 weeks while accounting for key operational constraints such as:

  • maximum number of SKUs that can be produced per day
  • target stock levels for upcoming days
  • margin per SKU based on batch sizes
  • production capacity per line and per day/hour…

Following an audit of the planning/forecasting process and tests on real-world datasets, our experts can identify and assess the impact of implementing our capacity planning model.

 

What value does the capacity planning tool deliver?

Using a quantitative capacity planning optimization model, businesses can better meet demand while maximizing margins—all while factoring in critical production constraints. This tool enables production managers to quickly test multiple scenarios and make more informed decisions.

 

*SKU: Stock Keeping Unit – a basic unit used in inventory management. It refers to a distinct item at a sufficiently detailed level to enable precise volume tracking for sales purposes.

 

 

Learn more about EURODECISION’s supply chain optimization solutions.