Lesson 1 of 5
Available capacity and capacity requirements
10 min
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MRP plans materials. It assumes that work centers have unlimited capacity: lead time scheduling places every operation where its dates fall, regardless of what else is already planned there. That is why plants run capacity planning as a second step. It compares what work centers can do with what the orders ask of them, and helps the planner move work so the plan is actually doable.
Two numbers are compared. Available capacity is what a work center can deliver in a period. Capacity requirements are the load that planned and production order operations put on it. Their ratio is the load: 100% is full, above 100% is an overload, well below is idle capacity.
| Available capacity | Capacity requirements | |
|---|---|---|
| Comes from | Work center capacity header: factory calendar, shifts, breaks, utilization, number of individual capacities | Operations of planned and production orders: standard values × quantity via formulas |
| Maintained by | Production engineering and plant management | Created automatically by scheduling orders |
| Changes when | Shifts, calendars or intervals change | Orders are created, rescheduled, confirmed or technically completed |
| Contoso example | ASSY-10: two 8-hour shifts, 85% utilization | 40 alternators × 0.5 h assembly time + setup |
Where available capacity comes from
A work center has one or more capacity categories, for example 001 machine and 002 labor. For each, the capacity header defines the factory calendar (working days), the standard shift (start, finish, breaks), a rate of utilization (the share of shift time that is realistically productive) and the number of individual capacities (for example three identical assembly stations). Intervals and shift sequences can override the standard for specific periods, such as a weekend shift in peak season. Available capacity can also be kept in versions, such as normal and maximum.
| Input | ASSY-10 (illustrative) | Effect |
|---|---|---|
| Shift | 06:00–14:00 and 14:00–22:00, 30-minute break each | 15 hours of operating time per day |
| Utilization | 85% | About 12.75 productive hours per station per day |
| Individual capacities | 2 assembly stations | About 25.5 hours of capacity per day |
| Factory calendar | Monday to Friday | No capacity on weekends unless an interval adds it |
How a work center's daily capacity is built. Values are examples; your formulas may differ.
Where capacity requirements come from
Each operation in a routing carries standard values: setup time, machine time, labor time. When an order is created, scheduling copies them, and capacity formulas on the work center turn them into load: typically setup time plus processing time per piece multiplied by the order quantity. The control key of the operation decides whether it is scheduled and whether it creates capacity requirements at all.
- RoutingOperation 0020 Final assembly at ASSY-10: setup 30 min, 30 min labor per alternator (0.5 h, as in the product cost estimate)
- OrderProduction order for 40 pc scheduled Monday to Tuesday
- Formula30 min + 40 × 30 min = 1,230 min ≈ 20.5 hours of load
- Load per dayDistributed across the operation's scheduled dates
- EvaluationCompared with ASSY-10 available capacity for the same days
Scheduling itself does not look at capacity. Lead time scheduling calculates operation dates from standard values, queue, wait and move times between operations, and float times before and after production (set by the scheduling margin key in the material master). Because it is infinite, it happily places two orders on the same station at the same time. That is not an error; it is the reason evaluation and leveling exist.
What would you do?
The Detroit planner sees ASSY-10 at 160% next Monday, yet the line supervisor says Monday looks normal. What should the planner check first?
Walkthrough: checking ASSY-10 before you trust any load
- Display work center ASSY-10, plant 1710 (
CR03, or the Manage Work Centers app) and open the Capacities tab: capacity category 001 (machine) should point to a capacity with the Detroit factory calendar. - Open the capacity header (
CR03→ capacity, orCR13): check the start and finish times, breaks, utilization 85% and 2 individual capacities. Check whether an interval or shift sequence overrides the standard in the test horizon. - Check the scheduling and capacity formulas on the work center (for example setup plus processing time per piece times quantity) and the standard value keys they use.
- Display the routing for CMC-ALT-100, production version 0001 "Detroit line" (
CA03): operation 0020 at ASSY-10 should carry the setup and per-piece values used in the hand calculation, with a control key that is scheduled and capacity-relevant. - Only now evaluate load. If any of these four checks fails, the load figure is a master data finding, not a planning result.
- Load = capacity requirements ÷ available capacity; above 100% is an overload.
- Available capacity comes from the work center capacity header: calendar, shifts, utilization, individual capacities.
- Requirements come from operation standard values through capacity formulas.
- Control keys decide whether operations create load; confirmations and TECO reduce it.
Check your understanding · not graded
Lesson check
1. What do capacity requirements come from?
2. A work center shows 140% load. What does that mean?
3. Which operation setting decides whether it creates capacity requirements?
4. Three converted work centers show overload in every future period. Which cause did Contoso find in Mock 1?