Capacity Planning in NAV/D365 BC – Part 1

What is Capacity Planning ?

Capacity planning is creating a production plan which includes all of the operations required to fulfil the customer demand.

Who uses Capacity Planning? – Manufacturing and warehouse companies

Benefits of Capacity Planning

Key aspects of capacity planning in NAV

•Shop Calendar

•Work Centres/Machine Centres

•Routing

•Released Production

Setup:

1. Shop Calendar – On the NAV/D365 BC, type Shop Calendar. A shop calendar is a setup used for entering the work shifts and holidays.

1.2 Click on Holidays to add the holidays so that capacity and load is not added to the work/ machine centres.

• A work centre can consist of a single machine with an operator who performs a specific task, such as assembly, machining, or casting.
• Work centres helps us identify the capacity load, allocated load and available after orders.

2.1. On your search bar, type work centres and click on New.

2.2. Add the Name and a work centre group code. You can create a group code of your choice.

Work Centre Group Code-This group code is used to for reporting purpose where suppose we assign all operations like assembly, machining, packing for a product under a group code we can run the report and check for allocated load etc.

Direct Unit Cost– This is the labour rate for a single operator to run the machine.

Indirect Cost % – It’s the general operation cost %

Overhead rate– This includes the non-operational cost like maintenance cost.

Unit Cost– Its the summation of Direct Unit Cost+ Indirect Cost %+ Overhead rate.

Unit Cost Calculation – This can be either time/units. If the work centre is internally used then we generally use it as time and if it’s sent out to a subcontractor then we set it up as Units.

Specific unit cost – Select the Specific Unit Cost field if you want to define the work centre’s unit cost on the routing line.

Flushing Method – Add the flushing method to the work centre. We have 3 flushing methods, please choose wisely depending on your requirement.

• Manual Flushing- The components of the BOM will be consumed when production/output journal is posted.
• Forward Flushing- The components of the BOM will be consumed when the production order is released.
• Backward Flushing – The components of the BOM will be consumed when production order is Finished

Gen. Prod Posting Group – Enter the Gen. Prod Posting group for the accounting ledger entries.

Unit of measure code – It’s the unit measure of time where capacity planning and cost calculations will be done. It can be in minutes, hours, days where 1 day =24 hours

Capacity – This can be either the operators or the machines. e.g. if you have 2 operators working on the machine then the capacity is 2 or if you have 3 machining machines that can run simultaneously then the capacity is 3.

Efficiency– Enter the percentage of standard output expected. By default 100 is the standard efficiency.

Consolidated Calendar– Enable consolidated calendar when you are using machine centres.

Shop Calendar code – Attach the shop calendar code you have setup in step 1. In my example it’s 3S

Queue Time– It’s a fixed time that must pass before task is assigned to the work centre

Queue time Unit of Measure code – Unit of measure for the queue time which can be minutes, hours, days.

Location code– Enter the location code if work centre is assigned to a specific location

Hierarchy of Work and Machine centres

• Work centre group code is assigned to many work centre working under the same group e.g. 3 machines working in the day shift where day shift can be a group code.
• There can be one to many work centres working serially or in parallel with each other.
• There can be one to more machine centres assigned to a work centre.

2.3 Once the work centre is setup, click on calculate work centre calendar to load the capacity to it.

2.4. Click on Load to check if Capacity is assigned to the work centre. Please note the allocated Qty and load is still 0 as we have not assigned any task to the work centre which is explained further in the blog.

This marks end of part -1. We’ll look at Routing and Production order in part 2 with allocated qty, load management, balance and costing.

Thank you for reading!