Capacity RequirementsCapacity RequirementsPlanningPlanning

(CRP)(CRP)

Capacity requirements Capacity requirements planning (CRP)planning (CRP)

““A computerized system that projects A computerized system that projects the load from a given Material the load from a given Material Requirements Plan (MRP) onto the Requirements Plan (MRP) onto the capacity of a system and identifies capacity of a system and identifies underloads and overloads.”underloads and overloads.”

-Russell and Taylor*-Russell and Taylor*

Uses of CRPUses of CRP

To Know:To Know:• If a construction company can start new If a construction company can start new

projects in the future.projects in the future.• If production plant can produce a If production plant can produce a

spontaneous order.spontaneous order.• If there is enough labor to make up for If there is enough labor to make up for

increased seasonal sales.increased seasonal sales.• If the orders that are do Tuesday can be If the orders that are do Tuesday can be

accomplished with current staff.accomplished with current staff.

Information enteredInformation enteredinto CRPinto CRP

•Planned order releasesPlanned order releases•Equipment and labor Equipment and labor

routing filerouting file•Open orders fileOpen orders file

Planned order releasesPlanned order releases

•From the MRP.From the MRP.•Tells when the order should Tells when the order should be started so that it is be started so that it is completed on time.completed on time.

Equipment and Labor Equipment and Labor Routing FileRouting File

Requirements of equipment Requirements of equipment and labor to complete the and labor to complete the needed orders.needed orders.

Open Orders FileOpen Orders File

Contains the information of Contains the information of the orders started that need the orders started that need to be completed.to be completed.

Information Provided by Information Provided by CRPCRP

Load profile for each Load profile for each operation in the production operation in the production systemsystem

Load profileLoad profile

Makes a comparison of the Makes a comparison of the work that needs to be work that needs to be completed and the work in completed and the work in progress with the systems progress with the systems capacity.capacity.

CRP is company specific CRP is company specific and requires complex and requires complex calculations.calculations.

For large companies For large companies professional help is needed in professional help is needed in designing their CRP models designing their CRP models because of the complexity because of the complexity and importance of accurate and importance of accurate information.information.

Calculating a simple Load Calculating a simple Load ProfileProfile

• Inputs into a simple load profile are Inputs into a simple load profile are capacity and load.capacity and load.

• *Capacity is the productive *Capacity is the productive capability of the system.capability of the system.

• *Capacity = (number of machines *Capacity = (number of machines or workers)*(number of or workers)*(number of shifts)*(utilization) *(efficiency)shifts)*(utilization) *(efficiency)

Definitions of CapacityDefinitions of Capacity

• Utilization is the percentage of total Utilization is the percentage of total time that the worker works or the time that the worker works or the machine runs.machine runs.

• Efficiency refers to how well the Efficiency refers to how well the machine or worker performs to a machine or worker performs to a given standard.given standard.

Definition of LoadDefinition of Load

• *Load is the standard hours of work *Load is the standard hours of work (or equivalent units of production) (or equivalent units of production) assigned to a production facility.assigned to a production facility.

Simple Load ProfileSimple Load Profile

• A simple load profile can be used by A simple load profile can be used by calculating the Load Percent.calculating the Load Percent.

• *Load Percent = (load/capacity)*100%*Load Percent = (load/capacity)*100%• Systems with a Load Percent over 100 Systems with a Load Percent over 100

will not complete assignments on time will not complete assignments on time without adjustments to the system. without adjustments to the system.

*Solutions to Overloaded *Solutions to Overloaded ConditionsConditions

• Eliminate unnecessary requirements.Eliminate unnecessary requirements.• Reroute jobs or labor.Reroute jobs or labor.• Splitting the job between two systems.Splitting the job between two systems.• Increase normal capacity.Increase normal capacity.• Subcontract.Subcontract.• Increase efficiency.Increase efficiency.• Push work back to later periods Push work back to later periods • Revise the master scheduleRevise the master schedule

Load Percent ExampleLoad Percent Example

A local construction company needs each of its houses cleaned A local construction company needs each of its houses cleaned of all construction debris before they can close with the buyer. of all construction debris before they can close with the buyer. They have one dump truck and a part time worker who works They have one dump truck and a part time worker who works twenty-five hours a week. Because of the part time status the twenty-five hours a week. Because of the part time status the worker takes no breaks. For every four hours of work there is worker takes no breaks. For every four hours of work there is one hour to drive the debris to the landfill to be unloaded. Five one hour to drive the debris to the landfill to be unloaded. Five percent of the time at the site is use to prepare the dump truck percent of the time at the site is use to prepare the dump truck for travel. For the month the construction company has 3 for travel. For the month the construction company has 3 houses closing at the end of the first week, 5 at the end of the houses closing at the end of the first week, 5 at the end of the second week, 4 at the end of the third week and 6, at the end second week, 4 at the end of the third week and 6, at the end of the forth week. What is the load percent at the end of each of the forth week. What is the load percent at the end of each week and can the work be accomplished in that week.week and can the work be accomplished in that week.

Construction Load Construction Load Calculations (Capacity)Calculations (Capacity)

• No. of hours =25No. of hours =25• Shifts = 1Shifts = 1• Utilization = 4/5 = 80%Utilization = 4/5 = 80%• Efficiency = 95%Efficiency = 95%• Capacity = 25*1*0.8*0.95 Capacity = 25*1*0.8*0.95

= 19 hours= 19 hours

Construction Load Construction Load Capacity (Load)Capacity (Load)

• LoadLoad

Week 1 = 3*4 = 12Week 1 = 3*4 = 12

Week 2 = 5*4 = 20Week 2 = 5*4 = 20

Week 3 = 4*4 = 16Week 3 = 4*4 = 16

Weak 4 = 6*4 = 24Weak 4 = 6*4 = 24

Construction Load Construction Load Capacity (Load Percent)Capacity (Load Percent)

• Load PercentLoad PercentWeek 1 = 12/19 = 63%Week 1 = 12/19 = 63%

Can AccomplishCan AccomplishWeek 2 = 20/19 = 105%Week 2 = 20/19 = 105%

Cannot AccomplishCannot AccomplishWeek 3 = 16/19 = 84%Week 3 = 16/19 = 84%

Can AccomplishCan AccomplishWeak 4 = 24/19 = 126%Weak 4 = 24/19 = 126%

Cannot AccomplishCannot Accomplish

Test Exercise of Test Exercise of Load PercentLoad Percent

A cabinet shop produces and installs cabinets into new A cabinet shop produces and installs cabinets into new houses. The cabinets need to be installed in the houses houses. The cabinets need to be installed in the houses the week they required to be installed to not slow down the week they required to be installed to not slow down construction. A crew of two people each working 40 construction. A crew of two people each working 40 hours can install a set of cabinets in 3 hours. They spend hours can install a set of cabinets in 3 hours. They spend about an hour each person driving to each installation about an hour each person driving to each installation location. Lunch breaks are not part of the forty hours location. Lunch breaks are not part of the forty hours worked and the cabinets are delivered by a separate worked and the cabinets are delivered by a separate crew. Due to experience they are a hundred percent crew. Due to experience they are a hundred percent efficient. For the month 10 installations are needed for efficient. For the month 10 installations are needed for week one, 7 for week two, 13 for week three, 14 for week one, 7 for week two, 13 for week three, 14 for week four. What is the load percent for each week and week four. What is the load percent for each week and can the installations be completed. can the installations be completed.

Capacity Requirements Capacity Requirements PlanningPlanning

• Used to calculate the ability of the Used to calculate the ability of the company to meet its orders.company to meet its orders.

• Best if company specific.Best if company specific.• Load percentage can be used for Load percentage can be used for

simple operations.simple operations.