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Capacity Planning Trends and Best Practices

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Capacity planning is an important component that industries and business managers should be well-versed with.

Unfortunately, despite its importance in ensuring business success, most conventional approaches to capacity planning are no longer practical.

Recent market volatility, rapid changes in customer behavior and preferences, remote work modes, and increased competition have made it mandatory for businesses to review their capacity plans regularly.

A recent McKinsey study on general American consumers shows that even though most customers have a lot of disposable income, they are very selective with their spending habits, always looking for options of spending less.

Innovative firms should adopt the following trends and best practices to stay ahead.

1. Adopting an Integrated System

Most industries market to clients based on data-driven findings. Unfortunately, most company heads don’t heed these findings when it comes to capacity planning. The core determinants of business success, such as resources and skill allocation, are often tracked manually or through disparate systems.

Lack of proper integration diverts critical real-time data and insights away from front-line managers tasked with making crucial decisions.

Therefore, companies should implement an integrated stack system, where data is channeled to one place. With this, decision-makers can improve on resource allocation and immediate ROI.

2. Use Modern Capacity Planning Tools

While numerous capacity planning tools are available on the market, most are outdated. The majority of capacity planning tools also primarily focus on resource allocation instead of holistic production/service capacity planning.

Therefore, industries should consider adopting modern capacity planning tools that consider all aspects of the business.

Fortunately, modern capacity software provides prescriptive analytics that allows users to predict their business model accurately, taking into account various constraints to provide feasible capacity plans.

Because these tools analyze the business as a whole, you can predict the capacity requirements of various business aspects.

3. Rethink Your Talent Pool

Capacity planning helps managers know the best time to hire more talent. However, the current era of the gig economy and contract jobs provides companies with semi-committed but trusted freelance talent.

As such, agencies can flex according to resource demands without making unnecessary long-term commitments. Unlike before, companies can now accept, own, and subcontract jobs slightly different from their specialization.

4. Prepare to Go Radical

Capacity planning aims at practically matching new or potential opportunities with resources to maximize profits.

However, as companies grow, matching these two essential faces increasingly becomes cumbersome. Small firms can easily match revenue opportunities with resources by assigning each member of their teams to specific tasks.

Large and established firms should borrow this technique as well. Established firms should reorganize into pods with dedicated functions.

With this, each pod member should be informed of their specific duties and held accountable. This approach highly simplifies capacity planning and empowers members. Decision-makers also get to invest in properly assessed opportunities.

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Managing your growing business can be challenging. Taking on new businesses without enough staff and resources can lead to burnout and affect company culture negatively.

Similarly, staffing before the expected curve risks your business profitability, especially if the expected new deals fail to materialize. Use the tips mentioned above to improve your industry’s capacity planning.

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