The goal of Demand Capacity Planning (DCP) is to avoid significant capacity
shortfalls and situations of serious under-utilisation. The emphasis is on potentially
serious misalignments beyond the time horizon covered in existing production
planning systems. Therefore DCP is positioned as a complement to existing ERP-
systems.

A key element in DCP is the detection of potential misalignments (capacity shortfalls
or under-utilisation) early enough to take preventive actions. After receiving updated
demand forecast information, DCP highlights the time periods with serious under or
over capacity.

In the first stage of problem solving, the supplier tries to adjusts his capacity to the
new demand situation with internal measures (e.g. banking, overtime, non-working
shifts). If these measures are not sufficient to solve the issue, the supplier will work
with its customer(s) to evaluate and decide on additional collaborative measures.
These measures (e.g. installation of additional shift, new tool, new line) are typically
associated with long lead-times for implementation, significant investment and risk
and therefore require approval of the commercial areas (purchasing / sales).

The DCP concept with its systematic, integrated and fast process and collaborative
elements leads to earlier and more reliable detection of capacity issues and will allow
the supplier to better adapt his capacity to the fluctuations of demand.