A production plan can pass every material check and still be undeliverable. The components are in stock, the work orders are ready, and the plant cannot make that quantity in that time because one operation has nowhere near enough room for it. That failure is predictable, and invisible to anybody who only checked the material.
Routing turns a product into a sequence of operations
Before capacity means anything, the product has to be described as work rather than as a bill of materials. That is what routing does: it defines the process steps a work order passes through, and it keeps them in order.
Routing and operation sequences are maintained alongside the material structure itself, which is covered in material structure and multi-level BOM. What matters here is what each operation in that sequence carries with it, because that is where the capacity question actually starts.
The machine or process behind each operation
An operation is not free-floating. Each one identifies the machine or work centre that performs it, and that allocation is recorded against the routing step rather than held in somebody's head.
This is the fact the rest of the page depends on. In exactllyERP, production capacity is defined at the level of the machine and the process, so naming the machine or process behind an operation is what connects a piece of work to something that has a limit. Routing without that allocation gives you a sequence and no capacity picture at all.
It is also why the same production resource keeps appearing as a reporting dimension elsewhere: work-in-progress, yield and capacity are all readable by work centre, because the work centre is where the operations were assigned.
Expected process time belongs to the operation
The second thing each routing operation carries is an expected process time.
That single figure does two separate jobs, and it is worth seeing both. Before production it is what converts a quantity into a capacity requirement: fifty units through an operation expected to take a given time is a specific, calculable demand. After production it becomes the reference the actual time is read against.
So the quality of those figures decides the quality of two different answers. It is worth settling early who maintains them, because an expected time that was accurate when the machine was new will quietly mislead once it is not.
From the plan to a capacity requirement
Now the pieces combine. A production plan says a quantity is needed. Routing says which operations that quantity must pass through, on which machines or processes, and how long each is expected to take. Together those produce a capacity requirement: not a general sense that the plant is busy, but a stated demand on named production resources.
This is where the boundary with planning sits. What should be produced, what material it needs and whether that material is available are planning questions, covered in production planning and material requirement. This page picks up the question that planning cannot answer on its own.
Required capacity against available capacity
exactllyERP compares the capacity a production plan requires against the capacity available, and the comparison can show where the planned requirement exceeds what is available.
A plan checked only against material gets accepted in full, because nothing in the check can object. The objection arrives later, on the floor, as a job that cannot start because the operation before it is still running, and by then the options are fewer. A plan checked against capacity can be argued with while it is still a plan.
What the comparison gives you is a visible shortfall: what has been planned needs more from a machine or process than it has to give. Deciding how to respond remains a production-planning decision, and the comparison does not by itself imply automatic rescheduling, machine reallocation or optimisation.
One response is worth naming, because it is a genuine option rather than a last resort: an operation can be performed outside the plant, and outside operations can sit in the routing rather than beside it. That is the subject of job work and subcontracting.
Capacity and utilisation by work centre
Because operations are allocated to machines and work centres, capacity utilisation is visible by work centre.
That answers a question a single plant-wide figure never can: not whether the factory is busy, but where. Two work centres at very different loads average out to something comfortable and mislead everybody. Seen separately, one is the reason the plan slips and the other has room nobody is using.
When production actually runs
Everything above happens before the work does. The other half of the subject is what gets recorded while it happens.
Actual machine or process time is captured operation by operation, through timesheet entry. The part that matters is the granularity: the time is recorded for the individual operation, not for the job as a whole. A single figure for a work order tells you it took longer than expected and gives you nowhere to look. Time held per operation tells you which step it was.
What the job's overall progress looks like while this is going on — how far through it is, which stage it has reached, whether it is behind — is execution, and it is covered in work-order execution and shop-floor tracking.
Expected against actual, at the operation
With an expected time on the routing operation and an actual time captured against it, the two can be compared.
This is the most useful thing here for anybody trying to improve a process rather than report on one. A work order that finished roughly on schedule can still contain one operation that consistently runs half again as long as expected, offset by others that came in early. At job level that cancels out. At operation level it is visible, repeatedly, until somebody looks at the machine or the method.
It also works in the direction people forget: an operation that consistently comes in well under its expected time is telling you the expectation is wrong, and every capacity requirement calculated from it has been overstated.
Where this stops
Two boundaries are worth stating rather than blurring.
The first is execution. Routing and expected time describe the structure work is supposed to follow; following the released job through it belongs to work-order execution. The second is cost. Actual process time captured during execution can later contribute to actual work-order cost, and what that means — how time becomes a rate, how it meets an expectation, how variance should be read — is properly covered in work-order costing and variance. This page stops at duration.
Following one job through
An illustration, kept deliberately plain and without numbers, because the shape is the point.
A product has to pass through three operations. Routing holds them in sequence, and each one identifies the machine or work centre that performs it and the process time expected there. A plan calls for a quantity of that product, and those three operations turn the quantity into a capacity requirement against three named production resources. exactllyERP compares that requirement with the capacity available. On the third operation the requirement is larger than the available capacity, and the comparison makes that shortfall visible.
The plan is adjusted and the work runs. As it runs, actual process time is captured for each of the three operations through timesheet entry. Afterwards the actual time at each can be read against what was expected there, and the third operation turns out to have been underestimated all along.
What to make an ERP vendor demonstrate
This subject demonstrates well, provided you insist on a plan that does not fit. The wider evaluation method is set out in the ERP selection and evaluation guide; the sequence below is the one specific to capacity and time.
- Show a routing with its operations in sequence, and the machine or work centre identified against each one.
- Show the expected process time held against an operation, and ask who maintains it.
- Show how production capacity is defined for a machine or process.
- Enter a plan that is deliberately too large, and show the required-against-available comparison making the shortfall visible.
- Show capacity utilisation by work centre, not as one plant-wide figure.
- Run the work, capture actual process time for an individual operation, and compare it with the expected time there.
Then ask what the system does not do, because that is where assumptions hide. Does capacity planning drive scheduling, or only report feasibility? How is available capacity arrived at — is there a shift pattern behind it? Are setup and run time held separately? Can an operation name an alternate machine? Does anything flag an overloaded work centre on its own? These are good questions precisely because the answers differ between systems.
How exactllyERP handles capacity, routing and process time
In exactllyERP, routing defines the process steps a work order passes through and maintains the operations in sequence. Each operation identifies the relevant machine or work centre, that allocation is recorded per routing step, and each operation carries an expected process time.
Production capacity is defined at the machine and process level. The capacity a production plan requires is compared against the capacity available, and the comparison can show where the planned requirement exceeds availability. Capacity utilisation is visible by work centre.
During production, actual machine or process time is captured operation by operation through timesheet entry, and expected and actual process time can be compared at the operation. That actual time can later contribute to actual work-order cost. The broader manufacturing workflow this sits inside is described on the manufacturing ERP page, and the functional scope across procurement, inventory, production and finance on the features page.
This page describes capability, not configuration. Which operations warrant their own routing step, how expected process times are arrived at and maintained, and who is accountable for entering actual time at the operation are implementation choices that depend on the plant. They are worth settling before go-live, because a capacity comparison is only as good as the expected times underneath it.
Common questions
What does production capacity planning mean in a manufacturing ERP?
It means asking a different question from material planning. Material planning asks whether the inputs are there. Capacity planning asks whether the operations the product has to go through can be absorbed by the machines and processes available to run them. Both can be answered wrongly in opposite directions: a plant can have every component in stock and still be unable to make the quantity in the time allowed, and it can have plenty of capacity standing idle for want of one component.
How does routing relate to production capacity?
Routing is what turns a quantity into a capacity requirement. It sets out the operations a work order passes through, in sequence, and each operation identifies the machine or work centre that carries it out and the process time expected for it. Once those three things are recorded against an operation, a planned quantity stops being an abstract number and becomes a specific demand on specific production resources. Without routing there is nothing to compute a capacity requirement from.
Does exactllyERP compare required capacity with available capacity?
Yes. exactllyERP compares the capacity a production plan requires against the capacity available, and the comparison can show where the planned requirement exceeds what is available. Capacity itself is defined at the level of the machine and the process. That comparison is the difference between planning and hoping: a plan checked only against material can be accepted in full and then quietly fail at the operation that had no room for it.
Is process time maintained for each routing operation?
Yes. Each routing operation carries an expected process time. That figure does two jobs. Before production it is what converts a planned quantity into a capacity requirement, because an operation with no expected duration cannot make a demand on anything. After production it is the reference the actual time is read against. It is worth deciding early who maintains those figures and how often they are revisited, because an expected time nobody has looked at in three years will quietly distort both answers.
Can actual process time be compared with expected process time?
Yes. Actual machine or process time is captured operation by operation, through timesheet entry, and expected and actual process time can be compared at the operation. That is more useful than a comparison at job level, because a work order that finished roughly on time can still contain one operation that consistently takes half again as long as expected. Aggregated to the job, that pattern disappears; kept at the operation, it is visible.
Does capacity planning mean the ERP automatically schedules or optimises production?
Not necessarily. Capacity planning and automatic production scheduling are separate capabilities, and one does not imply the other. Comparing required capacity against available capacity tells you whether a plan fits. Deciding the order in which jobs should run, or moving them automatically when they do not fit, is a different thing again. If automatic scheduling or optimisation matters to your operation, ask any vendor to demonstrate it in its own right rather than assuming it arrives with capacity planning.
Where to start
Take the last plan your plant accepted and then failed to deliver, and find the operation it actually failed at. Then ask what would have had to be recorded, before the plan was accepted, for that failure to have been visible in advance.
The answer is usually an expected time nobody maintains, on an operation nobody had assigned to a machine. If exactllyERP is on your shortlist, bring that plan to the demonstration and ask to see it refused.