Graham Potter says some players will be “disappointed” when Chelsea submit their Champions League squad following the club’s £289m January spending.
The Blues signed eight players during the transfer window but under Uefa rules, only three can be added to their squad for European fixtures.
Clubs must inform Uefa of their squad changes by midnight on Thursday.
However, Chelsea boss Potter said he was “excited” about the challenge his bigger squad will bring.
“There’s going to be a few awkward conversations. That’s the reality of where we are,” he said.
“Only 11 can play and only a certain amount can be in squads so there’s always going to be a certain amount who will be disappointed.”
Chelsea spent £289m during the January transfer window, taking their total spend since American businessman Todd Boehly took ownership in May to more than £550m on 17 new players.
“Challenge is the right word. Certainly not complaining about it – it’s exciting,” said Potter.
“It’s a test for me and the staff but an exciting one. We have a lot of really good players.
“We have to create an environment where there’s competition – healthy competition where they can push each other – but at the same time understand that there’s going to be frustration at times and only 11 can play.”
Meanwhile, Potter said he was “very pleased” by the signing of midfielder Enzo Fernandez from Benfica.
Chelsea completed a British record 121m euro (£107m) deal for the 22-year-old Argentine World Cup winner on Tuesday’s transfer deadline day.
“I found out that we’d signed Enzo when it was all done and I’m very pleased, because he is a fantastic player,” said Potter.
“My Spanish isn’t great, his English isn’t great, so we needed to lean on the translator but we’ll get there! He is an impressive young man.”
However, he added he is unsure if Fernandez will have clearance to play against Fulham on Friday (20:00 GMT).
Potter also said Morocco winger Hakim Ziyech, 29, was back in Chelsea training following the collapse of his proposed loan move to Paris St-Germain.
The move was blocked by France’s governing body, the LFP, because the documentation to complete the transfer was not submitted in time.
“He’s back. He trained this morning,” said Potter. “He’s a professional. He understands. He’s committed, he’s available. He’ll be an important player for the rest of the season.”
Chelsea are 10th in the Premier League, 10 points adrift of the competition’s four Champions League places after 20 matches.
