How to plan business capacity

01

Define demand and available capacity

Choose a unit of work and a planning period, such as completed requests per week. Estimate incoming demand using recent arrivals, confirmed commitments and known changes. Separate work types when they need different skills or amounts of time.

Available capacity is the amount of work the process can complete under stated conditions. Account for scheduled hours, absence, training, equipment downtime and time spent on support work. A person's paid hours are not all available for completing requests.

02

Find the limiting step

Map the steps from arrival to completion and estimate capacity at each one. A specialist, approval, shared system or supplier can limit the whole flow. Check whether work waits there and whether downstream blocks or rework are contributing to the delay.

Fictional example: a team expects 50 standard requests per week. Intake can handle 60, but review can complete 40. If arrivals and review capacity remain at those levels and the starting queue is zero, the review queue grows by about 10 requests per week. Four weeks would leave about 40 waiting. This assumes every request needs the same review and no work is diverted or lost.

03

Plan for a range of demand

Build a normal, low and high demand scenario using assumptions your team can explain. For each, compare expected arrivals with the capacity of the limiting step and estimate the effect on the queue. Include existing backlog in the starting position; do not count the same work as both backlog and new demand.

Choose a response before the busy period: schedule cross-trained cover, change the order of work, adjust commitments or add capacity at the limiting step. Check costs, lead times and quality requirements before making a commitment. Keep room for urgent work rather than assuming every available hour will be predictable.

04

Review and update the plan

Assign an owner to compare actual arrivals, completions, queue age and staffing with the plan each week or at a cadence that fits the work. Record why assumptions changed and update the next period's forecast.

Set a trigger for action, such as a queue reaching a level that threatens an agreed delivery date. Decide who can move work, arrange cover or tell customers about a delay. Review the process again after a change because the limiting step may move.

05

Reconcile the weekly backlog

Build a weekly planning sheet with opening backlog, new arrivals, completed items and closing backlog. In a hypothetical week, if 20 items are waiting on Monday, 55 arrive and 45 are completed, the closing count is 30, assuming none are cancelled or moved. Add a separate column for cancellations and transfers when they occur. Compare the closing balance with the following week’s opening balance to catch missing records.