What Is Resource Planning? (With Benefits And Techniques)

By Indeed Editorial Team

Published 15 May 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Resource planning helps businesses optimise their resources, staff and budgets. Many senior leaders and managers utilise resource planning strategies when supervising client projects and in-house activities. Knowing about different types of resource planning techniques can help you manage your team better. In this article, we answer, 'What is resource planning?', highlight its benefits, explain some resource planning techniques and discuss how to implement them.

What is resource planning?

Resource planning is the judicious utilisation of a company's precious resources, like its employees, finances and technology. The purpose of resource planning is to ensure the most efficient usage of a company's workforce and its resources. It includes all kinds of resources, like employees, machines, workplaces, computer software and company vehicles. It is vital for organisations to align company resources with the budget and project timelines to ensure maximum output.

There are six kinds of business resources in project management that work together to accomplish different organisational and project goals. These include:

  • Human resources: These include the people working on the project, like the full-time staff, contractors and consultants.

  • Tools and equipment: This can include laptops, projectors, software, machine and different devices.

  • Supplies and materials: These include all raw materials or hardware materials like nails, lumber and fuel.

  • Space: This includes the space or facilities in which the project takes place, like the company workplace or a production facility.

  • Money: This is the money or financing of the project and the expenses to run the organisation.

  • Time: This ensures that the project and team meet all the required deadlines.

Related: Human Resource Planning: Meaning, Importance And Key Steps

Benefits of resource planning

Here are some prominent advantages of resource planning for business:

Reduces expenses

The most important goal for many businesses is to maximise profit. Resource planning achieves this by reducing costs and saving money for the organisation. It helps organisations calculate how much they can produce with the available resources and efficiently allocate resources to achieve maximum profitability. Reducing expenses and saving financial resources by planning can help in ensuring that there is no cash flow deficit to meet the operating costs of the business.

Related: Revenue Accounts: With Definition, Types And Examples

Saves time

Apart from saving money, resource planning can also help in saving time. If a business can account for its resources, it allows for optimum use of labour, material or equipment in the right place at the right time. An effective resource planning system helps in streamlining production and people for the timely completion of projects.

Enables better customer service

Resource planning gives organisations a better understanding of the production cycle. It helps in improving communication with clients and customers about factors like order status and delivery timelines. Improved knowledge of the production and delivery schedule helps in more accurate product completion within the set timelines, which can improve customer satisfaction.

Related: 15 Necessary Customer Service Skills and How To Develop Them

Promotes efficient skill utilisation

Another essential benefit of resource planning is effective skill utilisation. The optimum utilisation of skills in an organisation can increase efficiency, and this can help the business operate at maximum output per shift. Effectively utilising the skills and abilities of the workforce also promotes a sense of employee satisfaction and can improve the rate of retention in an organisation. It helps prevent overstaffing or understaffing.

Helps meet demand

Effective resource planning enables organisations to meet unpredictable demand by regulating the output. By helping organisations plan ahead, resource planning allows organisations to staff optimally and place adequate orders for raw materials during periods of high demand. Conversely, it can help organisations make the most of their resources during lean production periods.

Enables better forecast

Effectively planning resources can help businesses make more accurate and reliable future projections. This can help in optimising the utilisation of staff, raw materials and resources by regulating them better. It can also help businesses plan their investment and growth goals better.

Resource planning techniques

Here are some essential resource planning techniques and strategies:

Capacity planning

Managers use capacity planning to oversee resource allocation and management across multiple projects. This helps determine if the allocated resources are adequate to complete any new projects. It also helps determine if the number of resources, or the degree of skill in the team, is sufficient for completing existing projects. Capacity planning helps in predicting future requirements and determining the scope, challenges and future phases of a project.

Resource utilisation

Resource utilisation ensures that the project's allocated resources are available at the required time. Project managers calculate the cost of resources while keeping a check on planned versus actual use of resources and take corrective action if required. Bottom-up estimating is a popular way of estimating all the components of the project accurately and measuring how much time and resources a project may require.

Resource levelling

Resource levelling is adjusting the start and finish dates of a project because of any resource constraints. Managers implement it to balance the demand for resources against the actual available supply. This technique optimises resource allocation by adjusting the project schedule and resolving any conflicts caused by the over-or-under-allocation of resources. For example, if a manufacturing company does not have adequate staff to complete all customer orders, it may extend the delivery timeline for some customers through resource levelling.

Resource smoothing

Smoothing is a technique that adjusts the activities and utilisation of resources, so it does not exceed the pre-defined resource limits. The method helps optimise resource allocation using ‘free float'. Free float is when an activity can delay or extend from its early start date without exceeding the project finish date. Managers usually implement levelling and smoothing techniques in conjunction with each other.

Discussions and meetings

Frequent meetings give project managers a forum to discuss the roles and responsibilities of each member and keep track of progress. This is another form of corrective resource planning that enables managers to review and make adjustments as required. The meetings usually have a set format and duration and tend to focus on short-term tasks, progress, feedback and challenges. Meetings to design long-term goals and activities typically take place at the beginning or before the commencement of a project.

Related: How To Write a Meeting Agenda: Guide With Tips And Sample

How to implement resource planning strategies

Follow these steps to implement resource planning techniques:

1. Determine the resources required

The first step is to identify all the resources necessary for a project. To accomplish this step, managers require comprehensive project and resource planning knowledge and an understanding of the specific project goals. In large organisations, managers usually consult the plans of existing projects as this helps create a guideline or framework for a resource management plan. Determining the resources can help managers and team leaders reserve the resources for the project.

Related: How To Calculate Growth Rate Using Different Methods

2. Match the right resources with the right tasks

Effective resource management essentially means allocating the right resources for project completion. In this step, managers identify which resource is the most suitable to accomplish project tasks and goals. Then, they allocate the resource to the project, along with clear responsibilities, expectations and timeline.

3. Schedule resources

A manager can schedule resources once the requirements of the project are clear. Managers can ideally use a resource management tool that shows current availability, tentative allotment and time allotted in making the right scheduling decisions for your project. For example, if a marketing project requires a graphic designer, the manager ensures that the designer has adequate work during all stages of the project. This ensures that all resources have sufficient time to complete their tasks. It also helps create the overall project delivery timeline and prevents overscheduling of the same resource for multiple tasks.

4. Keep a check on project progress

An essential step in resource planning is having regular meetings to get updates about the progress of the project. This helps the manager stay updated about any challenges and address them quickly. If a project faces a significant obstacle, a reallocation of resources or changing the overall strategy may be necessary. Post project analysis can also help managers find whether the projected resources match the scheduled resources.

5. Prepare to make adjustments

While dealing with the human factor in resource management, it is important to remember that not everything goes according to plan. Experiences managers recognise that the project might require adjustments based on factors like slow approvals, unavailability of resources or any other unforeseen challenge. It is essential for managers to make informed decisions and adjustments based on the availability of resources in real-time.

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