Role of manufacturing lead time in capacity planning

Manufacturing lead time plays an important role in production as well as capacity planning. To expedite a manufacturing order, the lead time must be controlled. If the required production capacity exceeds the available capacity, it can be increased by overtime planning. Manufacturing lead time can be considered to be the required capacity (rough–cut capacity) for a batch, and if necessary, overtime planning could be employed to assign more work–hours (i.e. available capacity) to the batch to accommodate the batch time within the specified capacity. Thus capacity planning has a significant impact on manufacturing lead time. This paper aims to formulate shop–routing–based measurement of manufacturing lead time, and analysing the impact of overtime (capacity planning) on manufacturing lead time, in order to facilitate integrated production and capacity planning.