Capacity PlanningLet’s start with the jargon and get it out of the way – workforce management, capacity planning, optimisation. I’m sure that immediately some of you are thinking – this has nothing to do with me!

But if you run a business or a team – even a small one – these are areas which need to be looked at constantly. Because they can have significant bottom-line impacts.

Capacity Planning is about being both strategic and tactical. It’s about looking at your long-term budget forecasts but always keeping on an eye on what’s happening right now. This means you always have your eye on the prize but you’re ready and agile to tackle potential challenges.

“You’ve got to think about big things while you’re doing small things, so that all the small things go in the right direction.” — Alvin Toffler

Workforce Management (WFM), simply put, is about really understanding the demands which are going to be made on your business and having the right capacity in place to deliver on these demands.

And this applies to a 20-person SME, a 300-person service centre, or a 5000-person organization.

Failing to get this right means you are either over or under-resourcing your business or team. Both of these lead to negative impacts. If you are over-resourced, you are spending money you don’t have to on staff. Under-resourcing can lead to customer issues in terms of complaints and quality, as well as people issues such as negative impacts on culture, talent attraction & retention, employee engagement and productivity.

And Optimisation? This is what differentiates good from great in the world of WFM/Capacity Planning. Optimisation – as the name suggests, involves doing a deep-dive analysis of a certain area of your business/team (or analysis of a contract) and rigorously interrogating how it has been set up. What tools are being used? What processes are currently in place? And how, through applying Lean tools and techniques can improvements which deliver either reduced costs or increased productivity be implemented? Done right, optimisation has significant, fast and lasting bottom-line impacts.

So, let’s see how you can apply these in any business.

Forecasting:

Accurate forecasting is the fundamental first step in the process to manage demand and plays a critical role in the protection of your key deliverables. Making sure you have the correct demand requirement in place means you reduce waste, or avoid impacts to performance and key KPIs from being “under-staffed”.

At 3SIXTY, we have significant experience in delivering forecasts for both business-as-usual demand and strategic growth, incorporating historical trends and planned/expected future activity.

Capacity Planning

Do you have the correct workforce to match your demand? This is what Capacity Planning is all about. We mentioned the strategic and tactical aspects to this above. But sometimes it can be hard to take that strategic view of Capacity Planning. At 3SIXTY we’re able to work closely with you, understanding your business and building a bespoke Capacity Plan to match the needs of your business, now and into the future, based on flexible forecasting models.

Performance Management

Once your forecasting and capacity plans are in place, it’s time to ensure you have a strong Performance Management structure. This is vital for success and means you can move on to continually improving your business. Implementing reporting and the appropriate operational processes means your targets are clearly defined, understood and measurable, ensures your workforce is engaged, and your management team has everything it needs to be effective.

Optimisation and Continuous Improvement

Now you’ve got your building blocks together it’s time to move onto the logical next phase – Optimisation and Continuous Improvement.

Processes and Systems are often left unchanged in the spirit of “if it ain’t broke, don’t fix it”. Human nature being what it is, this is perfectly understandable. However, this will leave a company performing at “good” and not exploring what “great” could look like.

Performing deep-dives into existing operational processes and systems can identify new and improved ways of working which can lead to reduced costs, improved productivity and ultimately, improved profitability.

We find most business owners, or people running teams, simply aren’t aware that Capacity Planning is the solution to an issue they are experiencing. There is a tendency to misdiagnose the real root-cause. So, here are some quick questions to think about.

  • Productivity – are your running costs regularly higher than you expect? Are your outputs regularly lower?
  • Recruitment/Absence – are your attrition rates regularly higher than you expect? Do you often feel the need to hire more staff? Is there regular feedback from your people that they are “under pressure”?
  • Capacity – can you see at a glance what your capacity (and optimal capacity) is at an overall business level along with an individual level?
  • Silos – do you/your teams feel that different areas are working “in silos”?

Answering “yes” to any of these questions might indicate that you need to take a closer look at Capacity Planning.

So how does this all affect the bottom line in the real-world? 3SIXTY worked with a client which had a lot of complex processes in place across the business. The complexity of these processes was being used as an excuse for not meeting SLAs and KPIs. In addition, morale was being impacted across several teams.

By getting a detailed understanding of the processes underpinning Forecasting, Capacity Planning and Performance Management, we were able to quickly identify and resolve the biggest issues impacting performance.

By implementing clear, measurable targets and introducing a Lean way of working, this client saw significant improvements in employee engagement, morale and business performance. By creating a more efficient operation, we were able to free-up significant capacity (equivalent to €450k in staff costs) for this client allowing these resources to focus on other activities.

Published On: January 27th, 2022 / Categories: Insights /
Brian O’Brien

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