The Benefits of Capacity Planning
One of many advantages of an engagement with Trindent Consulting is the development of a capacity planning model called the Area Workload Assessment (AWA), which Trindent custom-builds and calibrates for each client and each department within the scope of the client engagement.
Importantly, this is not a single-use tool developed for the duration of its engagement. Instead, it’s a perpetual tool that every manager will be given to use for staffing projections going forward.
What Is a Capacity Planning Model?
Capacity planning plays a key role in the production lifecycle of an organization. It’s “the process of determining the production capacity needed by an organization to meet changing demands for its products”. A capacity planning model, such as Trindent’s AWA is the tool that allows this critical planning function to take place.
The model takes into account factors like what activities are involved in the process, the best repeatable time to complete each activity, and a historical production volume. When these main variables are added up, plus a few others added to account for shrinkage, the model calculates what the optimal staffing resource level should be. A recent example comes from a Trindent engagement at a large insurance firm, where the AWA was deployed to determine how many agents were needed to underwrite a given amount of life insurance policies, while maintaining a certain level of service.
The model is dynamic and can be used to compare current and future state capacity. A great way to use the AWA is to input forecasted sales volumes along with current timings in order to project a future state for the capacity required to maintain operations, which allows an organization to stay ahead of the curve.
The Power – and Benefits – of Capacity Planning
Wages are one of the largest expenses incurred by any business, so planning for optimal staffing levels to ensure proper delivery of goods or services without overpaying for underutilized resources is a key activity to driving profitability. Trindent has observed that without proper goals, targets, and insight on production data, many companies are overstaffing at a rate higher than their growth, putting a huge strain on the cashflow needed to cover on wages.
It is, however, equally important to not understaff in order to avoid two potential pitfalls. The first is jeopardizing the ability to meet output targets and maintain service levels, which leads to reputational risk both with clients and within the industry. The second is the risk of employee burnout. By stretching current staff to maintain a higher than planned volume for prolong period of time can cause increased stress and decreased morale, leading to absenteeism and turnover.
By equipping managers with the AWA, a powerful capacity planning tool, Trindent gives them the ability to accurately utilize current staffing, and keep the business operating optimally.
Click here to read more about how Trindent can assist you to make the most of your capacity planning.