Glossary
What is capacity planning?
Establishing what each team can honestly promise for a period — gross FTE-months minus what is already spoken for — and committing demands against that line in priority order.
The two failures are planning against a gross number (holidays, support rotations and interruptions are not available capacity) and planning against an organisational total (capacity is per team; a spare month of mobile capacity does not build a backend service). The plan holds when each team's line is real and the demands walked down it stop at the line.
How to do capacity planning for an engineering team
Four steps, in order. Establish each team's honest line: headcount times months in the period, minus the support rotation, the run-the-business work, booked leave and a realistic interruption reserve. Size each demand per craft in FTE-months with a confidence level attached to every figure, and send anything you cannot size yet to a time-boxed discovery instead of guessing. Walk the demands down each team's line in priority order, subtracting as you go. Stop where the line is spent.
The step organisations skip is the third one. Sizing everything and then committing to all of it is not planning — it is a list with numbers next to it. The plan only becomes a plan at the moment something falls below the line and someone has to say so.
Capacity planning vs resource planning
Resource planning assigns named people to named work, usually in days or hours, and answers "who is doing what next week". Capacity planning at the commitment level answers a different question: can this team honestly promise this work in this period at all? The two run at different altitudes and neither substitutes for the other — but only one of them needs to happen before a date is promised outside the team.
That is why the unit matters. A commitment-level plan built in hours invites a precision nobody has three months out; built in FTE-months it broadcasts its own error bar, which is exactly what a promise made on other people's time should do.
What to do with the first demand past the line
There are four honest exits and one dishonest one. Park it with a review date and the condition that would revive it. Decline it with a reason the requester can read. Displace something already committed, visibly, so the trade is on the record. Or commit it early anyway with a recorded exception naming why now, what is still missing, who is accepting the risk, and what would change the decision.
The dishonest exit is rounding the line up until everything fits. It is the most common one, it costs nothing on the day, and it is the reason the quarter ends with three things late instead of one thing refused.
Related terms
- FTE-month — One full-time person working for one month — a capacity unit that is comparable across teams and, where cost is recorded, is the multiplier a cost forecast would use.
- Allocation vs consumption — Allocation is what people are committed to; consumption is what they spent. Delivery governance measures allocation and deliberately does not measure consumption.
- Capacity line — A team's honestly available capacity for a period, stated in FTE-months — the constraint that commitments are walked down against, in priority order, until it is spent.
This definition comes from building DeliverySheet — it takes a vague work request to a clear delivery decision, so the shape, owner, capacity, dependencies and open questions are on the table before anyone commits people or a date.
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