Capacity is the most frequently overlooked aspect of portfolio decisions. The budget is approved, the project is launched; however, it goes unnoticed that the same five engineers are simultaneously working on nine projects. The result is that none of the projects are completed on time.
Scope
Demand side: The role, skills, man-months, and time frame required for each portfolio item.
Supply side: Existing staff, their skills, leave and absence schedule, subcontractor capacity, production line and testing laboratory capacity.
Bottleneck analysis: Identifying which role or piece of equipment is constraining the entire portfolio. The portfolio's speed is the speed of the biggest bottleneck.
Overload warnings: Periods when capacity is exceeded are visible before a decision is made.
Capacity-budget alignment: Verifying whether the human resources available correspond to the approved budget.
In the real business world
In most businesses, capacity planning is done on the assumption that "everyone will dedicate 100% of their time to the project." In reality, an engineer spends a significant portion of their time on maintaining existing products, answering customer questions, and administrative tasks. A realistic plan would allocate this maintenance burden first and only dedicate the remaining capacity to new projects.
When this calculation is done, many businesses find that the capacity they believe they are dedicating to new product development is actually much less. This finding alone is one of the most valuable outcomes of portfolio management.
Benefit to the customer
The promised delivery dates are realistic.
The number of projects running simultaneously is limited according to capacity, thus speeding up the workflow.
Recruitment and outsourcing decisions are supported by data.
This prevents key personnel from becoming overloaded and experiencing burnout.