Skill Buffer Levels

Here I want to take a look at the concept of having resource and skill buffers so that suppliers (internal or external) can meet short term spikes in demand.
When you have a drop in demand, you need to understand if the drop is likely to be long term or short term. A short term drop in demand gives you the opportunity to train staff and improve the organisations capabilities to handle future changes in customer demand. A long term drop in demand needs to be managed based on the organisations long term strategic objectives and it ability to cope with the drop in demand.

Balanced Supply and Demand of Resources

The ideal solution is to have a clear understanding of the demand for resources and the supply of resouces. The illustration below represents the situation where the demand and supply is balanced. Staff finishing one assignment are re-allocated to another assignment reasonably quickly. All incoming work can be completed to the clients expectations.

Balanced Supply and Demand Buffer Level

Balancing supply with demand when there is increased demand for resources

The economy is picking up and the company is finding it difficult to supply staff with the right skills. Commitments can possibly be met with overtime and moving staff to take up work on their secondary skill group. The buffer is in the lower orange zone, so we know that we must now plan to take action to replenish the skill groups that are in short supply of staff.
Once the skill pool is in the lower red zone, you will be losing revenue generating opportunities. The buffer level is negative.

Buffer level when demand increases

Here we must ask ourselves a few questions:
QU 1: How long does it take to increase the pool of staff in the skill group?
(a) Based on job market,
(b) Education time,
(c) Other available sources such as subcontractors.

QU 2: Is the demand from clients, the result of an unusual spike in demand that will level out in a week, or is it a long term rise in demand?
For a short term peak can the demand be solved with overtime.

QU 3: Will other work assignments be completed shortly?
If we are short of skills in one project, are there people with the required skills that will finish a project in the next couple of weeks who can be assigned to the project in question?

QU 4: How long can other projects or jobs be kept waiting before being adversly affected?
For e-commerce sites or hospital systems that go down, they will want immediate attention.
For change requests they may be prepared to wait a couple of weeks.
For new software projects to start, you can possibly delay resupply on developers, but may need business analyst and requirement development skills fairly soon in order to get started.

QU 5: How much Throughput will be lost if we do not replenish/increase the skill group?
When we move into the orange we will possibly not lose any client work, but we must work overtime etc to get that work done.
When we move into the red, then we will lose assignments from clients. If we need four developers to do the work, then we have a buffer level of -4.

Managing the buffer when there is a decrease in demand for Resources

The orange area represents a move to a positive buffer level. There are staff in the skill group that do not have work within their skill group, maybe they are re-assigned to other skill groups.
The red area will represent staff who do not have any work. The person managing the buffer needs to assess if this is a temporary surplice of staff in the skill group or if it is likely to be long term.
EX: If four developers have no work, then the buffer level for developers is +4.

Buffer level with decrease in demand
Buffer level with decrease in demand