Capacity planning is a vital part of any manufacturing or production facility, one that tends to get overlooked when it comes time to designing your facility and determining production methods.

The term can mean a lot of things depending on how it’s used, but in the context of production and manufacturing capacity planning refers to the process of determining the production capacity needed to meet the demand for its products. Strong capacity planning can help control your businesses’ costs and stock in the long run, and if you want to start planning around your capacity, here’s a few things to keep in mind:

Products/Services Offered: One of the biggest impacts on overall capacity is what your facility produces or the service you provide. Factories that manufacture smaller items of similar design will be able to produce higher quantities of item much more easily than factories that deal in a wide variety of items, or items with vastly different production techniques. Think of your production output like a menu at a restaurant – restaurants with limited menus can prepare and serve meals much faster than restaurants with varied, extensive meal selection.

Facilities and Equipment: The design of your facilities and the equipment you use is a vital part of capacity planning. If you choose to scale up your production and output, do you have the equipment and industrial storage to keep up? Or will you have to bring in more item production, wire shelving, and raw materials in order to maintain consistent output? The physical location of your factory is a factor too; if your facility is too far from your clients, transportation and shipping may become a concern when production is increased.

Human Resources: If you have enough equipment to keep up with an increase in output, what about your workers? Staff levels are critical in any discussion of capacity planning, and even if your staff levels are met there’s always the question of the re-training and product knowledge needed to keep up with any change in output.

External Factors: Even if your facility and staff is all set up and ready to increase capacity, there’s still external concerns to keep in mind. Market concerns may prevent your distributors or customers from engaging in your capacity increase, which could leave you with excess product. Manufacturing regulations in regards to union hours and pollution concerns could prevent you from using certain types of equipment or having your workers perform certain types of tasks. And there’s always issues with your suppliers to worry about – even if you’re ready for increased production, it isn’t going to do anyone much good if you don’t have the raw materials to keep up.