Nikhil Sawant

Capacity planning is critical to ensure total demand is serviced with accuracy and within the prescribed timelines, to meet contractual obligations, pre-empt or manage disruptions, sustain operations, ensure operational resiliency, navigate through challenges and ensure client satisfaction.
 
In most of the organizations, capacity planning is done taking into consideration the following direct & indirect factors/aspects :-
Processing volume arrival trends & patterns  Seasonality of volume - Cyclical volume due to macro & micro economic  conditions, market events etc Existing Baseline - Available time per FTE, Volume processed per FTE, Volume that can be processed in available time Cycle time at task level, Lead time, Takt Time Throughput Process shrinkages  Learning curve Process complexity Turnover rates - current and anticipated Time it takes to hire attrition backfills Peak demand System downtime Set-up time Coverage window specified in Service level agreement Labour laws Permissible breaktimes Holiday calendar Production enablers  Productivity Utilization Efficiency Shift Alignment Peaks & troughs Atomic level resiliency Recovery Planning Level of upskilling Manual touchpoints Automation Digital transformation initiatives Overtime & Night Shift allowance Very simple example of capacity calculation/ planning:
if the available time per FTE per day is 480 minutes Production enablers = 80 minutes  Actual available time per FTE per day = 480-80 = 400 minutes Production enablers includes deduction for meeting time, calls, training time, holidays, learning curve, hiring time etc Daily demand is to process 20000 widgets Time taken to process 1 widget is 2 minutes Then total demand in terms of minutes = 20000 *2 = 40000 minutes
 
# FTEs required to service the total demand = 40000/400=100 FTEs 
 100 FTEs are required to process 20000 widgets per day.
*FTE = Full Time Employee
 
Above example is a simple illustration of capacity calculation/ planning. However the actual process is much more complex with nut & bolt level deep-dive involving complex calculations, extrapolation of  numerical data basis the underlying assumptions and carefully baking in the aforementioned 30 influencing factors.