What is Capacity Analysis?

For an order fulfillment, materials handling, or manufacturing operation to be truly successful, certain best practices must be followed. Measuring Key Performance Indicators (KPIs) and using them to analyze your business’s performance over time is one such factor. Others include investing appropriately in employee training, ensuring that you are choosing the best partners for your company’s needs, and investing in the right technologies to keep you competitive.


While all of these factors are important, there is one critical factor which has a tremendous impact on how productive your operation can be: capacity analysis.


Capacity analysis is the process of determining the capacity of an operation. In this regard, “capacity” can have a number of meanings, and a truly comprehensive capacity analysis will evaluate the physical capacity of your infrastructure and facilities, your production capacity, and your mechanical capacity.


Physical capacity of infrastructure and facilities: How much space is available for work processes and storage of inventory


Production capacity: The peak throughput of all the systems in an operation. (I.e how many orders can be processed compared to demand.


Mechanical capacity: The peak throughput of specific machines and technology, for example, sorters, conveyors, palletization equipment, etc.


By better understanding how these various capacities compare to demand, a warehouse or DC manager can identify inefficiencies, pinpoint areas for improvement, and implement technologies, work-flow, and systems to help get an operation where it needs to be.