The main function of capacity planning is to check the load at Work Center and do the capacity leveling

i.e. balance the load at Work Center. It helps to calculate the production capacity based on the
requirement of the product against the available capacity of the work center.
MRP works with infinite capacity and creates planned orders at the Work Center at the same time since it
assumes that Work Center is available all the time. So, it creates planned orders on the same date based
on the requirements despite capacity shortages. You can execute those orders on that Work Center in the
system which is not practically feasible in the shop floor.

The main objective of the capacity leveling includes leveling overloads at Work Center and to
achieve optimum utilization of Work Centers.

MRP generated planned orders are converted to production orders which determine which Work
Center is to be used, and accordingly the capacity requirements are generated on that Work Center.

Capacity leveling at production order level is used for detailed production planning purpose. This
is done through planning table which is used to carry detailed planning of capacity requirements over
time in future.

The capacity load needs to be checked at Work Center, and if it is overloaded, then we need to
shift the orders ahead to the same Work Center or plan it in different Work Center to eliminate any
capacity constraints.

Main CRP elements introduced by SAP are:

Available capacity
Scheduling
Capacity Requirement
Capacity evaluations
Capacity Leveling
Capacity reduction
We need to maintain master data related to capacities in Work Center (CR01) in Capacities Tab Page.
There we maintain capacity category like Machine, Labor, Processing unit, Electricity, Transport, external
processing etc. along with formulas (i.e. Setup, processing, teardown, pooled capacities etc.)
and Capacity requirement is based on these Set up, processing and Teardown time factors all together
based on actual process and requirement of planned or production order. These different time factors are
assigned to operation via routing. And further resources are attached to operation and
finally Scheduling is used to determine the times of the capacity requirements.
In production planning requirement is normally consists of Planned Order, Production orders, Process
Orders and SOP orders.
Other PP master such as Material master, BOMS, routing and factory calendar are pre- requisites for
capacity planning function. The capacity planners responsible for machine loading are obliged to process
the scheduled capacity requirements in production on time.

Further standard available capacity is maintained in respective header data of capacity category.
Available capacity is the work that can be done by a capacity at a work center per working day.
Operating time of capacity is calculated considering start time and finish time of capacity category minus
lengths of break considered for resource/work center multiplied by capacity utilization percentages. For
available capacity calculation SAP consider Factory Calendar attached in Header Data of work center
capacity category.
For example, lets say Machine is capacity category. And it is available from 7.00 a.m. to 7.00 p.m. and
there is one hour break during this available time. And Management anticipates 85% utilization of
machine. And no of machine are two nos of same specification.
So in this case available capacity will be calculated as followsShift hours [7.00 AM to 7.00 PM] less [Break 1 hour] * [No of Machine or capacities 02
nos] *Capacity Utilization (85%)
So Available Capacity = (12-1) * 2 * 85/100 =18.7 hrs
Another important element of CRP is Capacity Evaluation which is used to analyze capacity loads in
company. In the capacity evaluations, requirements can be compared with the available capacities.
Capacity Leveling function is used to dispatch operations. Operations are dispatched in order to fix them
at a point in time when there is sufficient capacity for them to be carried out. The objectives of capacity
leveling include:
Leveling overloads and under loads at work centers
Achieving optimum commitment of machines and production lines
Selection of appropriate resources
And SAP has provided interface called capacity planning table which enables to carry out detailed
planning of capacity requirements continuously over time. One can use planning table to carry out
simulation.
Capacity reduction is necessary for accurate capacity planning functioning. Capacity reduction occurs
when operations are confirmed or order quantities are reduced or cancelled.