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Capacity Planning: A Critical Element of the Production Process

October 8, 2019

Imagine this: You’ve won the big contract. You’ve dotted every i, crossed every t, and the paperwork is freshly signed and initialed. Yet, despite your efforts to check capacity before negotiations began, by the time you’re able to start the job new orders have rolled in, and your timeline is now at risk.

Suddenly, before you’ve ever started, you’re behind.

Understanding capacity constraint is a critical issue for manufacturers today. Processing orders on time and on budget requires that savvy manufacturers look to their own operations to identify even more opportunities for adding capacity through lean thinking, eliminating wasted cycles, and opening up additional capacity without the need to add additional people.


For G&W Products, a world-class contract metal manufacturer, they chose to improve capacity by improving technology. The company had been receiving increasingly complex orders. In their early days, an assembly that had 15 parts led to a manual paper chase. Inventory was all managed in an Excel sheet. And, scheduling was managed on a white board on the shop floor.

They knew that to compete and win bigger business, they would have to change to be able to take on more work. But instead of trying to add more people and more processes, G&W instead chose to focus on the technology that could enable their workforce to be more productive, effective, and efficient.

A cloud-based unified MES and ERP system today allows G&W to handle assemblies with hundreds of part numbers. A task that would have been impossible without adding head count.

The company has also:

  • Increased on-time delivery from mid-80% to as high as 98%.
  • Reduced inventory by 25%—to less than 40 days on-hand.
  • Achieved lowest overall PPM at 176—better than world class.
  • Increased profitability 12%.

To learn more about how G&W reached its goals, check out the G&W case study. Also, see how a Manufacturing Execution System (MES) can transform your shop floor.

About the Author

Stu Johnson Director of Product Marketing, Plex Systems

Stu Johnson served as Director of Product Marketing of Plex Systems from June 2014 to March 2020.