Traffic Jams and Capacity Planning for Processes

Accidents and Traffic Jams have a lot to teach about Capacity Planning for Business Processes!

Whether it is Claims Processing or Home Loans or Help Desks, processes invariably deal with traffic jams.

Usually, there could be long, serene periods, when things are flowing smoothly; no customer is waiting on the phone long enough to be annoyed, and the people providing the service are not overworked and cranky!

Then there are peak periods in a Year when processes see Peak Volume - Day of the week, Month ending, Quarter ending crush or Annual crush (like Tax return time for tax preparers!) when peak volumes of work are seen in short bursts confounding the most diligent of capacity and work force planners!

Traffic Jams have taught traffic planners that when 70% to 80% of the capacity of any road is fully used, any small perturbation will cause massive slowdown for everyone. If an accident happens in one lane, every lane slows down because cars in the lane where the accident happens slow down to merge with the lane to their right or left whichever is available. This makes the entire traffic slow down even if you have five or six lanes each way!

The effect of any perturbation is less and less felt as the capacity utlization at any time is less than 70%. There is enough spare capacity for the other lanes to take up the slack and you may not have a traffic jam that requires everyone to slow and stop.

In a Business Process, capacity planning can always benefit by keeping the overall utilization less than 70% at any time. Novice managers may look at this and say that this is a waste of resources. But compared to the agony and customer dissatisfaction that may be caused by traffic jam equivalents in Business Process, and the consequent delays and waits you may subject customers to, this may be a small price to pay.

One of the things striking about Toyota or even many other Japanese automobile factories is that for the first two years they really do not care about the production throughput that much. They are using that time to fix problems by addressing root causes permanently!

When these factories are in full production, unlike other automakers they may not run their assembly lines in three shifts! Most of these plants do only two shifts and the third shift is used for finishing up planned production for the other two shifts as well as addressing root causes of problems faced in the assembly line as well as preventive maintenance of the facilities.

This ensures that everyday’s production schedule is met, you may have fixed problems before they occur, permanently. Preventive maintanance ensures that machines are inspected, lubricated and ready for the next day!

Business Processes should use the same concept and never plan for using capacity any more than 70%. This way, in the long run they may come out ahead rather than attempt for more utlization than the 70%. You may come out ahead on efficiency, but your effectiveness may have suffered irreparably!

Something to think about!

He who fails to plan, plans to fail - Proverb