What are the Effective Ways to Manage Capacity Planning Bottlenecks?
In today’s technological landscape, businesses face rapidly changing skill demands and intense competition due to globalization and market volatility. This makes it challenging to anticipate future skill demands and fill competency gaps within the organization, leading to resource related challenges.
Effective capacity planning is key to solving these issues, but managers often face bottlenecks that can cause project delays, lower productivity, reduce profitability, and create client dissatisfaction. To overcome these capacity planning bottlenecks and ensure successful project delivery, managers must address them and implement the right solutions.
This article explains the best ways to manage capacity planning bottlenecks and see how advanced resource management software like SAVIOM can help with that.
But first, we must understand what the capacity planning bottlenecks are.
Let’s get started:
1. Major capacity planning bottlenecks
The aim of resource capacity planning is to balance resource supply with demand and ensure that the right resources are available at the right time to meet project requirements. But several obstacles can inhibit this process.
Some of the significant capacity planning bottlenecks includes:
- Lack of visibility into resource excess/ shortage:
When organizations do not have foresight into pipeline projects, they fail to assess resource excess/shortage ahead of time. Therefore, when there is a resource shortage, it leads to last-minute firefighting and hiring of high-cost employees. On the other hand, excess capacity results in increased bench size or resource underutilization.
- Skills mismatch:
In the absence of centralized visibility into resources, it’s a challenge to facilitate competent resource allocation. As a result, a skilled employee may be assigned to a mundane task. Contrarily, an under-skilled employee deployed to a high-level task will compromise the project quality. Such skill mismatches can lead to employee disengagement and decreased productivity.
- Unavailability of niche resources:
When managers cannot predict project requirements, especially for niche-skilled resources, in advance, it leads to costly last-minute hiring. This can lead to budget overruns. Moreover, the unavailability of these resources can result in project delays or affect the quality of delivery.
Now that we know what major capacity planning bottlenecks are, let’s discuss the effective ways to manage them:
2. How to manage capacity planning bottlenecks?
When capacity planning bottlenecks are not mitigated on time, it can hamper the project quality and timeline. Thus, resource managers must be proactive in tackling the roadblocks.
Here’s how they can do it:
2.1 Forecast pipeline resource demands in advance
Due to rapid technological changes, there is a higher risk of skill obsolescence. Therefore, organizations need to forecast future skill requirements to build a highly proficient workforce. Moreover, with accurate forecasting, they can identify the existing skill gaps and create strategies to bridge them proactively.
It enables managers to formulate necessary training/upskilling programs or initiate hiring. All these will help minimize resourcing costs by avoiding last-minute high-cost hires, enhance the firm’s sustainability, and provide a competitive edge.
2.2 Maintain a balance between contingent and permanent workforce
Organizations should use a judicious combination of contingent and permanent workers in order to keep ahead of the changing skill demands. Thus, contingent workers can be brought in to provide additional capacity during peak periods or to fill one-off niche skill requirements. On the other hand, permanent employees can be hired to fulfill recurring skill demands.
For example, in an accounting firm, certified public accountants (CPAs), senior managers, etc., can be hired permanently. In comparison, additional tax preparers, bookkeepers, and auditors can be hired temporarily during peak seasons. This will help firms to maintain a flexible workforce that can meet the demand volatilities.
2.3 Implement out-rotation and backfill strategy for niche resources
The demand for niche skilled resources is often difficult to meet, and due to their high costs, organizations only keep a limited number of these resources. However, with effective capacity planning, managers can implement an out-rotation and backfill strategy to effectively leverage niche-skilled resources across multiple projects.
For this, resource managers need to assess the pipeline requirements of these resources. Then, they can out-rotate the required niche-skilled resources from ongoing projects that have crossed the critical stage. Afterward, they can fill these positions with equally competent employees. This will allow firms to handle multiple projects with fewer resources.
2.4 Facilitate training and upskilling programs
Once the resource manager has identified the skill gaps, one of the effective methods to mitigate them is through training and upskilling programs. In addition, managers can implement other measures such as mentoring, peer-to-peer coaching, shadowing, on-the-job training, etc., to bridge the gap.
Thus, it helps create a multi-skilled workforce that can be deployed to diverse and advanced projects. For instance, an IT company needs a SQL developer for a project. Instead of hiring a new resource, managers can train existing JAVA developers before the project begins. This fulfills the project demand and upskills the existing employees without any extra hiring cost.
2.5 Formulate a risk mitigation plan
In a project lifecycle, several bottlenecks can arise, such as last-minute scope changes, unplanned attrition, employee absenteeism, etc. If these are not tackled proactively, it can hamper or derail the project outcome. In such a situation, managers can simulate a sandbox environment to create numerous scenarios, compare the possible results, and choose the best resource plan.
Moreover, managers can conduct succession planning to find replacements for critical positions. Doing so can help organizations prevent resource-related risks from jeopardizing business continuity. Therefore, effective capacity planning helps firms stay forewarned of risks and formulate appropriate mitigation plans.
Now, let’s see how the next-gen resource management software can help you mitigate capacity planning bottlenecks.
3. How can advanced resource management software help manage capacity planning bottlenecks?
With SAVIOM’s advanced resource management software, managers can effectively manage and eliminate capacity planning bottlenecks. Let’s see how:
- The software provides 360-degree visibility of all resource-related data, like their profiles, skills, competencies, availability, cost rates, etc. It assists managers in finding the best-fit resources for the projects and ensures competent allocation.
- Further, the tool has robust forecasting capabilities that help managers to foresee future demand and take resourcing measures in advance.
- Next, the capacity-vs-demand report highlights any shortage or excess of resources, which helps bridge skill gaps effectively.
- Moreover, the software provides a competency matrix that records employees’ skills, experience, and qualifications. It helps managers identify partial matching skills in resources so that they can be trained to fulfill the skill requirements.
- Lastly, the tool provides a what-if-analysis feature, where managers can simulate multiple scenarios to tackle sudden resource-related risks.
Thus, these unique features can help in overcoming the capacity planning bottleneck.
Effective resource capacity planning is crucial for an organization’s success and sustainability. With the above-mentioned practices and an advanced resource management solution, firms can meet all project demands and maintain a competitive edge in today’s constantly changing marketplace.
Victor Z Young is a Civil Engineer with 35 years of experience working alongside the executive team of various construction companies. Victor specializes in construction insurance, delay analysis, performance analysis and engineering. He holds a Doctor of Project Management from Northwestern University.