Capacity Management: Definition, Process, and Examples

Capacity of an organization depends on several factors. It is a variable quantity that may change due to changing conditions and external influences, like seasonal demands, industry changes, and other macroscopic events of the surroundings. But an ideal company must remain quick enough to constantly meet the expectations of the market.

 

It is important for the organization to implement capacity management, meet the demand-supply inventory of the market. It can be achieved by several modifications and adjustments. In this blog, we will study the details about capacity management.

 

Also Read | Business Process Management

 

 

What is Capacity Management?

 

Capacity management is defined as the act of ensuring maximum potential activity of businesses. It focuses on greater production output all the time, under each and every condition. It is basically defined as the business benefits a company can achieve, produce, or sell within a given time period.

 

The process of capacity management includes a wide variety of planning actions. These actions ensure that a business infrastructure has adequate resources to maximize its potential activities. It also focuses on guarantee production in any organization under any condition.

 

The theory and action plans of capacity management consists of planning, IT monitoring, and information related to IT and technology management. The plan laid capacity to handle data processing requirements across different life cycles. The major goal of capacity planning management is to balance costs incurred against resources required.

 

The procedure of capacity management primarily deals with the performance, memory, physical space, operational, and development environment. It includes the development of all aspects of businesses for example, human resources, hardware, networking equipment, software and peripherals.

 

The capacity management helps to compare the available resources within the time deadline. It analyzes the capacity and gives you an overview of your business. Such as if the composition of human capital in a company matches with the actual needs of the organization or not.

 

Capacity management helps in analyzing resource availability and make it easier for the companies to check their availability and skills for the upcoming projects. This analysis also assists the project managers and directors to take effective decisions for hiring new people and projects. It also helps in managing the demand and supply of the resources.

 

Objectives of Capacity Management

 

Capacity management is the art of capacity management that emphasizes well utilization of resources. The objective of capacity management is to maximize the profits for businesses within the given limits. 

 

Capacity management planning differs from organization to organization. It is different as per the business types. The common and shared objective of capacity management are as follows:

 

1. Capacity management planning helps to identify the capacity requirements.

 

2. The planning helps to meet current and future projected workloads.

 

3. Capacity management helps in the development and maintaining of businesses.

 

4. Capacity management ensures that the performance goals of an organization are met on time.

 

5. Capacity management ensures the process of business within the budget.

 

6. Capacity management monitors the capacity continuously to bind the service level management.

 

7. Capacity management assists in diagnosing and resolving incidents occurred during business procedures.

 

8. Capacity management helps in analyzing the impact of variances on capacity.

 

9. Capacity management takes proactive measures to improve performance.

 

10. Capacity management helps in cost optimization during the whole process.

 

Also Read | Cost Benefit Analysis

 

Examples of Capacity Management

 

Different organizations have different criteria for capacity management. The capacity of a business depends on the type of the products, services, and duties delivered by the organization. The examples of capacity management may include the following cases.

 

1. A coffee café that can produce 500 cups of coffee per day.

 

2. A call center that can handle 5000 calls per week.

 

3. A pharmaceutical production line that can assemble 30 lakhs capsules per month.

 

4. A restaurant that can accommodate 100 family dinners per night.

 

5. A car service system that can repair 10 cars per hour.

 

Let us consider a broad example of a television manufacturer. A TV producing company always needs to make sure that it is able to meet the demand of the market. Now the company will hire a special team to read and realize the market requirements.

 

The special team analysis that IPL is going to begin in the coming month, so the demand for television in the market will be apparently higher than usual. It also released data that HD television with prime quality will be more than the usual televisions. 

 

Now, the next step of the organization is to check its capacity, if it is sufficient enough to meet the market requirements or not. The organization analyzes that it doesn’t have sufficient requirements to handle the demand. Also, the fact that the market demanded is expected to go down as soon as the IPL season ends. 

 

So, now applying the principles and procedures of capacity management the company would think of leasing employees and machines rather than purchasing or buying for permanent.

 

Once the company leases machines and employs manpower for the purpose. It will start producing fresh new HDR television sets for the market. This is how the process of capacity management works in real life, and the way by which industries and organizations manage their capacity to meet the supply and demand chain of the market.

 

Also Read | Business Process Notation

 

 

Process and Procedure of Capacity Management

 

Capacity management tools help in measuring the volumes, speeds and efficiencies of the movement of data. Data journey helps in the data’s journey through the IT infrastructure. Capacity management helps in the process of organization of applications.

 

Capacity management enables the organization to examine the operations of all hardware and software in the environment. It also captures the critical information related to data flow. The capacity management program has measurement and analysis tools that must enable it to observe the individual performances of IT assets.

 

The capacity management includes the elements such as servers, end-user devices, storage systems, storage network devices, cloud services, and network communication devices. The capacity management can be achieved via software, hardware or by manual means. Capacity management relies on the interception of data movement metrics.

 

The first step of capacity management is the emulation programs. Emulsion programs are effective tools for capacity management. The programs mimic the application programs like database management. It ensures its own sets of test data to ensure accurate and consistent results.

 

The second approach of capacity management involves the employment of hardware-based monitoring devices. The capacity management focuses on the network performance and provides comprehensive information.

 

A capacity management process is three step procedure that involves following steps:

 

1. Capacity Calculator

 

The first step of capacity management is to estimate a clear detail of the current resource capacity. The organization first needs to prepare a utilization report. The utilization report helps to understand the expected shortages of the business. Thus, helping in maintaining the capacity management strategy for upcoming processes.

 

2. Determining the Resource Needs

 

Based on the purpose or scope of the project. It is essential to make a list of present resources and missing resources. This will help you to determine the kind of team you need to hire for the purpose.

 

3. Prioritizing the work

 

Hiring and assigning the team task isn’t the only task to do. It is essential to do some smart projects and task prioritization. If you don’t make your list first, this might make you miss your capacity.

 

Also Read | What is Cloud Mining?

 

 

Components of Capacity Management

 

Capacity management provides high-level information on a variety of business components. It assists to gather as much possible information that attempts to correlate the measurements into an application-centric picture.

 

The major categories include processing power, memory, storage capacity and speed for all the intermediate processes for the businesses. Here is the brief introduction to all the components of capacity management:

 

1. Performance: Performance is the key metric factor in capacity management. It is essential for an organization to detect its bottlenecks. It affects the overall efficiency of businesses. Best performance helps in the upgradation of businesses.

 

2. Memory: Memory is the other important factor in capacity management. If the memory of the company system isn’t stabilized it will slow down the overall process. Insufficient memory is itself the biggest bottleneck for the organization.

 

3. Physical space: Physical space is commonly associated with the focus to generate storage space for application and data.

 

Also Read | Business Process Discovery

 

 

Factors that weaken the Capacity Management and Project Delivery

 

There are several factors that affect the organization performance and play a vital role in defining the capacity management of the network or basically, website business. The primary list includes:

 

1. Delay: Sometimes the delivery of a project or network takes too long to deliver. It takes a whole time for data transmission as several factors are responsible for this. 

 

A simple data is broken into several parts such as frames, pockets and segments. While reliable protocols allow receivers to get a notification after delivery of each data. Thus, making it possible to measure the round-trip time.

 

2. Reception order: Some real-time protocols, for consideration voice and mp4 require packets to arrive in the correct order to be processed. If packets arrive out-of-order, it may drop the data transmission.

 

3. Packet loss: Packet loss may occur due to errors in overloading of the intermediate network. Packet loss can also occur due to intentional discarding of the traffic to enforce a particular service level.

 

4. Retransmission: Retransmission occurs when packets are lost in a reliable network. Retransmission faces two delays, the first arises from re-sending the data and the second is the result of data waiting.

 

5. Throughput: Throughput is the amount of traffic, network can carry. It affects the project delivery of the businesses.

 

Also Read | Business Process Mapping

 

 

Types of Capacity Management Planning

---

 Types of Capacity Management Planning

---

 There exist three types of capacity management planning, which serve the different needs of different organizations. It is beneficial for both short-term and long-term resources management:

 

1. Product Capacity Planning

 

Product capacity planning ensures the adequate product and services ready for the serving and delivery proposes.

 

2. Workforce Capacity Planning

 

Workforce capacity planning helps in estimating the efficient number of team members and hours required to complete the task. Workforce capacity also helps in identifying the ideal time to start recruiting new employees and onboarding process details.

 

3. Tool Capacity Planning

 

Tool capacity planning ensures the supply of adequate equipment to complete the jobs, assembly line components, and other requirements for the delivery of the products.

 

 

Advantages of Capacity Management

 

The advantages of capacity management are as follows:

 

1. Improvement of performance.

 

2. Reduction of consumption.

 

3. Fine tuning of applications and other components of businesses.

 

4. Elimination of reductant work.

 

5. Consistent monitoring of business plans.

 

6. Improvement of organizational and IT services.

 

Also Read | Examples of Information Technology

 

There are several providers available in the market and on the internet that provide capacity management plans and processes to the organization. All you need is to identify the goals and needs of your company, and then work in the required direction to implement full capacity management.