Course contents
Foundation · Course 1: How a Garment Factory Works · Lesson 3 of 5

Capacity planning: how a factory decides how many orders it can accept

Level: FoundationTime: 45 minutesOrder used: A (the T-shirt)Tool: Factory workflow and capacity worksheet
This lesson is for anyone who needs to know whether a factory can take on a new order: a merchandiser, a buyer, a new employee, or a student. No previous lesson is needed, although lesson 7.1.1 on factory departments adds useful background. Figures are teaching examples. At work, use your own factory's real, currently committed capacity.
FactoryDelta Garments (garment factory)
Existing orderOrder A, 15,000 pieces, fixed 2-week sewing window
Factory headcount600 sewing operators, factory-wide
New enquiryCedar & Co. checks its own next production run
Requested windowThe same 2-week window Order A is using
Overtime costUSD 0.15 per piece, Order A's fixed rate
02Opening

This page explains what factory capacity means and how to check whether a new order fits inside what a factory has left to give

This page is for anyone who has to answer a buyer's question: can this factory take on our order, and by when. A factory's capacity is not an opinion; it is a fixed amount of people, machines and hours in a given period, and most of it is usually already promised to orders confirmed earlier. A person who quotes a delivery date without checking what is already committed is guessing, not planning.

This matters most to a merchandiser at a factory, since a buyer will hold the factory to whatever date the merchandiser confirms. Delta Garments, a garment factory with 600 sewing operators, is used throughout this lesson because it is one factory everyone can picture, already running Order A, a 15,000-piece order with its own fixed 2-week sewing window, when a second enquiry arrives.

Without this knowledge, a merchandiser answers a scheduling question by thinking only about how fast the factory could theoretically make the goods, and forgets to check how much of that same capacity is already spoken for. This lesson gives you the method for checking committed capacity before any date is confirmed.

03Before you start

What you need, and what this lesson does not cover

You need: nothing but this page. You do not need to have planned a factory's production schedule before.

By the end of this lesson you can:

  • explain what a factory's capacity means, in a given period, with its current people, machines and hours;
  • use the method in this lesson to check whether a new order fits a factory's remaining, uncommitted capacity;
  • explain why overtime adds costed capacity rather than base capacity;
  • read the working template's target and actual output columns to see whether spare capacity genuinely exists;
  • avoid the common mistake of quoting a delivery date before checking what is already committed.

Not covered here: the departments inside a garment factory (lesson 7.1.1), how a factory finds a bottleneck once an order is already running (lesson 7.1.4), and pre-negotiated seasonal capacity itself (lesson 1.4.2).

04Key terms

Words you will meet in this lesson

TermMeaning
CapacityThe maximum quantity a factory, a line or a department can produce in a given time, given its current people, machines and hours.
Capacity planningWorking out how much of a factory's available capacity a new order would use, before deciding whether to accept it and by when it can ship.
Capacity utilisationThe share of a factory's available capacity actually being used by confirmed orders, expressed as a percentage of its maximum output.
Pre-negotiated capacityFactory production capacity a buyer reserves ahead of a season, before a specific order is confirmed.
Make to Order (MTO)Production starts only after a specific buyer has confirmed a specific order, with quantity, price and delivery date agreed.
Make to Stock (MTS)Producing against the seller's own sales forecast, rather than a single confirmed buyer order.
05Teaching
The rule

A factory can only promise what its remaining, uncommitted capacity allows, not what it could theoretically produce

A factory's capacity is the maximum quantity it can produce in a given period with its current people, machines and hours. Before accepting a new order, a factory must check how much of that capacity is already committed to existing orders. An order accepted beyond remaining capacity cannot actually be delivered on time, however firmly it is promised, because the people, machines and hours it needs are already doing other confirmed work.

Weeks 3-4the rest of Order A's own overall production scheduleOrder A's own fixed sewing window (2 weeks) occupies part of the sewing line's capacity.A new order needing its own 2-week sewing window in the same weeks competes for that same capacity.
Order A's 2-week sewing window occupies part of Delta Garments' sewing capacity, inside Order A's own 16-week overall timeline. The sewing window, not the whole 16 weeks, is the period a new order competing for the same line would need to fit inside.
What you meet in real life

The same capacity question takes a different shape depending on the order's size, the buyer and whether overtime is on the table

A person who has only checked capacity for one kind of order should not assume every capacity question looks the same. The shape of the check changes, but the underlying rule does not.

What can differThe shapes you meetWhy it matters
A single large order's own shapeOne order of 15,000 pieces can occupy a large share of a line's capacity for its own sewing window, leaving little room for another order on the same line at the same time.A single big order can commit a whole line by itself, not just a fraction of it.
Several smaller orders running togetherA factory may run multiple smaller orders on different lines, or in sequence on the same line, each using a share of total capacity.The shares must be added up together, not checked one order at a time, or the total commitment is understated.
Export versus domestic capacity commitmentAn export buyer like Northline Apparel may agree pre-negotiated capacity ahead of a season; a domestic Make to Stock buyer like Cedar & Co. instead places orders against whatever capacity the factory reports as free at the time.Changes whether a slot was already reserved months ago or is being checked fresh today.
Overtime as extra, costed capacityA factory can extend its own capacity temporarily with overtime, at Order A's own fixed cost of USD 0.15 per piece.Overtime adds capacity at an added cost; it is never the same thing as base capacity that costs nothing extra to use.
The case we follow

Delta Garments' 600 sewing operators, already committed to Order A, facing a new enquiry from Cedar & Co.

Delta Garments has 600 sewing operators across the whole factory. Order A, Northline Apparel's 15,000-piece order, is already running on part of that capacity, with its own fixed 2-week sewing window. Before Order A's sewing window ends, Layla at Cedar & Co., a domestic Make to Stock brand also produced at Delta Garments, checks whether the factory can start Cedar & Co.'s own next production run, the same size as Order A, in that same 2-week window, so the domestic brand's own shelves are restocked on schedule.

FactWhat it tells Delta Garments
600 sewing operators, factory-wideA total headcount figure, not proof that any specific line is free right now
Order A's own fixed 2-week sewing windowAlready committing part of that headcount for those exact two weeks
The new enquiry's requested windowThe same 2-week window Order A is already using
What Mona has checked so farNothing yet — she has not compared the new order's requirement against what remains free

Delta Garments' total headcount is a real number, but it describes the whole factory, not the specific line or operators the new order would actually use.

The worked number

Order A's fixed 2-week sewing window, and what accepting a second order in the same window would cost in overtime

This example is illustrative, not a claimed fixed academy fact: no single committed-hours figure for Delta Garments' sewing line is fixed in the master cast. What is fixed is Order A's own 2-week sewing window and its own overtime rate. If that window is fully committed to Order A, a second, similar order sharing it needs either idle capacity elsewhere in the factory or costed overtime. Order A's own fixed overtime rate gives a sense of scale for what extending capacity, rather than assuming it is free, would cost for one order this size.

15,000 × 0.15 = 2,250

Overtime cost, in USD, for producing Order A's own 15,000 pieces on overtime instead of within base capacity.

600sewing operators, factory-wideUSD 2,250overtime cost for one order this sizea factory-wide headcount does not by itself pay for a second order's window
A large factory-wide headcount does not by itself cover a second order's sewing window for free. Extending capacity with overtime for one order the size of Order A costs USD 2,250, at Order A's own fixed rate.
The method

How to check whether a new order fits a factory's remaining capacity

  1. Identify the relevant capacity the new order would actually use: the specific line, department or factory-wide resource.
  2. Identify how much of that capacity is already committed to confirmed orders, and for what period.
  3. Identify the new order's own quantity and required delivery window.
  4. Compare the new order's capacity requirement against what remains uncommitted in that same window.
  5. If the new order does not fit, either propose a later delivery window, add costed overtime capacity, or decline the order rather than overpromise.
The trap

Quoting a delivery date to a new buyer based only on how fast the factory could theoretically produce the order

A common mistake is treating "we could make 15,000 pieces in 2 weeks" as proof that a new 15,000-piece order can also ship in 2 weeks, without first checking how much of that same capacity and time window is already committed to other confirmed orders. The same sewing line may already be fully committed to Order A for that exact window, which the theoretical production speed says nothing about. Quoting a date this way promises a delivery the factory may not actually be able to keep.

06In plain words

A factory's capacity is the most it can produce in a given time with the people, machines and hours it has right now. Before saying yes to a new order, a factory has to check how much of that capacity is already promised to other confirmed orders, and for which weeks. A big total headcount for the whole factory does not prove one specific line is free. If the new order does not fit the time left, the factory can offer a later date, pay for extra hours, or turn the order down. Promising a date based only on how fast the work could theoretically be done, without checking what is already committed, risks a promise the factory cannot keep.

07Quick check
  • Capacity is fixed for a given period: the same people, machines and hours cannot make more than their maximum in that time.
  • A factory-wide headcount is not the same as a specific line or department being free right now.
  • Several smaller orders on the same line must have their capacity shares added together, not checked one at a time.
  • Export buyers sometimes reserve capacity ahead of a season; domestic Make to Stock buyers usually book against whatever is free today.
  • Overtime adds capacity at an added, costed rate; it is never free base capacity.
  • A new order that does not fit remaining capacity needs a later date, paid overtime, or a decline, not a hopeful promise.
08Workplace scenario

Layla at Cedar & Co. asks Mona whether Delta Garments can start its own next production run in the same 2-week sewing window Order A is already using

Layla, the merchandiser at Cedar & Co. (a domestic Make to Stock brand also produced at Delta Garments), asks Mona, the merchandiser at Delta Garments, whether the factory can start and finish Cedar & Co.'s own next production run in the same 2-week sewing window that Order A is currently using, because Cedar & Co. wants its own shelves restocked on schedule.

  • Order A's own fixed sewing window is 2 weeks, inside Order A's fixed 16-week overall timeline.
  • Delta Garments has 600 sewing operators across the whole factory, not all necessarily free at the same time as Order A's own line.
  • Mona has not yet checked how many of those operators are already assigned to Order A versus other confirmed work.

Layla's message reads:

"Hi Mona, we'd love our next Make to Stock run to start in the same 2-week sewing window as Order A. Can Delta Garments fit us in?"

Should Mona confirm to Layla that Cedar & Co.'s new run can be finished in the same 2-week window as Order A, without first checking committed capacity.

Show decision

No. Mona cannot honestly confirm a production window until she has checked how much of the factory's relevant capacity is already committed to Order A and any other confirmed work in that same period.

First, Order A's own fixed 2-week sewing window. That window is already occupying part of the factory's sewing capacity right now, on a specific line, for two named weeks. A new, similar order asking for the same weeks is asking for a share of that same, already-committed resource.

Second, what the 600 sewing operators actually prove. Delta Garments' total headcount of 600 is a factory-wide figure, not proof that a specific line is free. Mona has not yet checked how many of those operators are already assigned to Order A versus other confirmed work, so the number cannot answer Layla's question by itself.

Mona should check remaining capacity, line by line, before quoting any date to Layla. Confirming first and checking afterward risks promising a production window the factory cannot actually meet.

09What it costs

The cost of promising the same 2-week window before checking committed capacity

If Mona promises the new order for the same 2-week window without checking, and the factory later discovers the line is already fully committed to Order A, Delta Garments faces one of two costs. It can pay for overtime capacity: Order A's own fixed overtime cost of USD 0.15 per piece gives a sense of scale, since 15,000 pieces × USD 0.15 comes to USD 2,250 just for one order's worth of overtime.

15,000 × 0.15 = 2,250

Or it can miss the promised date, which damages the relationship with Cedar & Co. Both costs are ones a capacity check before quoting a date would have avoided. Against Order A's own FOB price of USD 3.20 per piece, used here only as a benchmark for scale, USD 2,250 in unplanned overtime for a similar-sized run is a real, avoidable share of an order's margin, not a small rounding cost.

10Working template

Factory workflow and capacity worksheet: read the target and actual output columns to see whether spare capacity exists

Open the Factory workflow and capacity worksheet. For the sewing line row, compare the target output column against the actual output column for Order A's own committed window. Where actual output already fills the target for the weeks a new order would need, that line has no spare capacity left for those weeks; where a gap remains between target and actual, that gap is the spare capacity a new order could actually use. Fill in the actual output and notes columns for your own order before quoting any delivery date, and leave the bottleneck column for lesson 7.1.4.

Download the Factory workflow and capacity worksheet (Excel)

11Check yourself

1. What does a factory's capacity mean in this lesson's rule?

2. Why can a factory not simply quote a new delivery date based on how fast it could theoretically produce an order?

3. A factory with two sewing lines has Line 1 fully committed to an existing order for the next 3 weeks, and Line 2 completely free. A new order needing 3 weeks of sewing capacity is enquired about. Can the factory accept it using Line 2?

12Glossary
ENARFRTRMeaning
Capacityالطاقة الإنتاجيةCapacitéKapasiteThe maximum quantity a factory, a line or a department can produce in a given time, given its current people, machines and hours.
Capacity planningتخطيط الطاقة الإنتاجيةPlanification de capacitéKapasite planlamaWorking out how much of a factory's available capacity a new order would use, before deciding whether to accept it and by when it can ship.
Capacity utilisationمعدل استغلال الطاقة الإنتاجيةTaux d'utilisation de la capacitéKapasite kullanım oranıThe share of a factory's available capacity actually being used by confirmed orders, expressed as a percentage of its maximum output.
Pre-negotiated capacityطاقة إنتاجية محجوزة مسبقًاCapacité pré-négociéeÖnceden ayrılmış kapasiteFactory production capacity a buyer reserves ahead of a season, before a specific order is confirmed.
Make to Order (MTO)الإنتاج حسب الطلبFabrication sur commande (MTO)Siparişe göre üretim (MTO)Production starts only after a specific buyer has confirmed a specific order, with quantity, price and delivery date agreed.
Make to Stock (MTS)إنتاج حسب المخزونFabrication sur stockStoğa üretimProducing against the seller's own sales forecast, rather than a single confirmed buyer order.
13Next

Lesson 7.1.4: Common production bottlenecks and how a factory identifies where work is piling up

You now know how to check whether a new order fits inside a factory's remaining capacity. The next lesson turns to a different question: once an order is already running, how a factory finds the one stage that is slowing every stage after it. Back to the course map

14Ladder

RecognizeName what a factory's capacity means in a given period.
ConnectSee why a factory-wide headcount does not prove a specific line is free.
CompareTell a factory's remaining, uncommitted capacity from its total theoretical capacity.
DecideCheck committed capacity before confirming any delivery window to a buyer.