Here are 5 of the Best Capacity Optimization Tips

Capacity Optimization

One of the hottest supply chain topics of 2021, aside from shortages and sustainability, has been the issue of capacity planning and optimization. When the COVID-19 pandemic hit, it shook up the global supply chain in numerous ways. The industry has bounced back better than before in some areas, yet struggles to adjust to new ways of operating in others.

Capacity is one of those other areas…


Measure what you have

Before you can begin your optimization process, you need to know how well all your vital, physical parts operate and how well-aligned they are to meet your capacity planning approach. Essentially, you need to perform thorough data collection before doing anything else.

This is done by implementing solid digitization practices across all your most important areas of operation. When all of your critical machinery is monitored in real-time and data is output via a centralized hub, it allows you to more easily measure your current capacity goals, keeping an eye on all aspects of production without wasting any time trying to collect and organize your data on the fly. This is especially true where your OEE is concerned.

The idea that you need to collect data is, obviously, a no-brainer. But the goal of digitization isn’t only to more accurately collect information on your operations. The goal of digitization is also to centralize that data and more readily compare it against specific criteria. Digitization in this way is simply important to the overall health of your business, but it also shines when making any major adjustment such as looking to implement a new capacity approach.


Set up a system for collecting data

The next tip to optimizing your capacity is to ensure that your IIoT is set up with the proper sensors and devices to be tasked with monitoring your machinery. Sensors and devices should be tuned into your floor operations. Your internet-connected devices should be connected to your WMS and IMS to measure the amount of product being produced against the amount of product in demand. If you can create a digital environment that offers abundant data about your production, not just your OEE, you can determine and begin to attempt to improve the efficiency of your machinery and optimize their processes.

Data should be evaluated periodically, and it’s important to have regular checks in place to ensure that your supply chain works at its most optimal.


Use maintenance scheduling

Perhaps the greatest threat to supply chain capacity strategies is having breakdowns. While you have the OEE, and you have the metrics in place to ensure that fleets are functioning at their best, you cannot avoid the occasional breakdown. But that doesn’t mean that you can’t minimize the risk. Use machine learning algorithms to predict problems that could arise. AI within these programs can also schedule maintenance before a breakdown occurs.

Second to machine maintenance, supply chains should focus on the maintenance of the software being used for their WMS and IWS. These two systems are critical to the operation of the supply chain and therefore must be maintained. Data should be analyzed to determine if your warehouse is stocking enough or too much material and to help you avoid stock-outs or overstocking.


Use S&OE and AI to fine-tune production planning

Sales and Operation execution (S&OE) should be used to accurately align production processes. The monitoring can be done in real-time, which alerts any disruptions. S&OE can also monitor the demand and transport conditions of the supply chain. When coupled with AI or other machine learning software, not only can you find out the supply and demand and the efficiency of your fleet, but you can identify any trouble areas regarding ordering or shipping.

When you can look at the cost and quality of your supply, you can find information about one component or supplier and see if there is a difference in cost.


Put analytics into play

The last tip is to maintain the capacity through the use of real-time supply chain information. This can be accomplished by leveraging prescriptive analytics. Prescriptive analytics must have requisite levels of data integration to optimize the capacity of the supply chain.

Sophisticated algorithms can evaluate the entire stream. Specifically, production streams can be monitored and areas that need to be improved are identified and solutions given which would be beneficial if changed.



To fully optimize your capacity, it is essential to know what you have, set up strategies through various metrics to monitor the machinery of your warehouse, perform maintenance on your software, have real-time monitoring, and plan. While there are other ways in which you can improve the capacity of your workflow, digitalization can help tremendously. New technology is essential to capacity optimization providing solutions that are otherwise impossible.