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    Capacity & Capacity Planning

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    Shashank Aggarwal
    Capacity planning involves determining the production capacity needed to meet demand and selecting strategies to address capacity needs. Capacity is the maximum output or resources available. Factors like shifts, product variations, and quality affect capacity. The capacity planning process involves forecasting demand, evaluating capacity options, and selecting the best plan. Strategies include lead, match, and lag capacity. Expansion adds capacity ahead of needs while wait-and-see relies on short-term options and is easier to adapt. A capacity cushion accounts for excess capacity above average usage. Short-term capacity options include overtime, multi-skilling workers, and subcontracting.

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    Capacity & Capacity Planning

    Uploaded by

    Shashank Aggarwal
    35 views13 pages
    Capacity planning involves determining the production capacity needed to meet demand and selecting strategies to address capacity needs. Capacity is the maximum output or resources available. Factors like shifts, product variations, and quality affect capacity. The capacity planning process involves forecasting demand, evaluating capacity options, and selecting the best plan. Strategies include lead, match, and lag capacity. Expansion adds capacity ahead of needs while wait-and-see relies on short-term options and is easier to adapt. A capacity cushion accounts for excess capacity above average usage. Short-term capacity options include overtime, multi-skilling workers, and subcontracting.

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    CAPACITY

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    Capacity planning involves determining the production capacity needed to meet demand and selecting strategies to address capacity needs. Capacity is the maximum output or resources available. Factors like shifts, product variations, and quality affect capacity. The capacity planning process involves forecasting demand, evaluating capacity options, and selecting the best plan. Strategies include lead, match, and lag capacity. Expansion adds capacity ahead of needs while wait-and-see relies on short-term options and is easier to adapt. A capacity cushion accounts for excess capacity above average usage. Short-term capacity options include overtime, multi-skilling workers, and subcontracting.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    35 views13 pages

    Capacity & Capacity Planning

    Uploaded by

    Shashank Aggarwal
    Capacity planning involves determining the production capacity needed to meet demand and selecting strategies to address capacity needs. Capacity is the maximum output or resources available. Factors like shifts, product variations, and quality affect capacity. The capacity planning process involves forecasting demand, evaluating capacity options, and selecting the best plan. Strategies include lead, match, and lag capacity. Expansion adds capacity ahead of needs while wait-and-see relies on short-term options and is easier to adapt. A capacity cushion accounts for excess capacity above average usage. Short-term capacity options include overtime, multi-skilling workers, and subcontracting.

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    Capacity & Capacity Planning

    Strategic Capacity Planning


     Capacity
     The maximum level of output

     The amount of resource inputs available


    relative to output requirements at a particular
    time

     Capacity is the upper limit or ceiling on the


    load that an operating unit can handle.
    Factors affecting Capacity
     Number of shifts and lines that is active
    at any time is a controllable factor.
     Product variations.
     Quality conformance.
    Best Operating Level

    Average
    unit cost
    of output
    Underutilization Over-utilization
    Best Operating
    Level

    Volume
    Capacity Planning Process

    Develop Quantitative
    Forecast
    Alternative Factors
    Demand
    Plans (e.g., Cost)

    Compute Evaluate Qualitative


    Rated Capacity Factors
    Capacity Plans (e.g., Skills)

    Compute Select Best


    Implement
    Needed Capacity
    Best Plan
    Capacity Plan
    STRATEGIES
     Lead capacity strategy
     Match capacity strategy
     Lag capacity strategy

    matc
    h
    lead

    lag
    Two Capacity Strategies
    Planned unused Forecast of Forecast of
    capacity Planned use of
    capacity needed short-term options capacity needed
    Capacity

    Capacity
    Time between
    increments

    Expansionist Strategy Wait-and-See Strategy


    Advantages/Disadvantages of each strategy
    Advantages Disadvantages

    Expansionist • ahead of competition • risky if demand


    • no lost sales changes

    Wait-and-See • no unused capacity • rely on short-


    • easier to adapt to term options
    new technologies
    Capacity Cushion
    Capacity Cushion = level of capacity in excess of the average
    utilization rate or level of capacity in excess of the expected
    demand .

    Cushion = Best Operating Level - 1


    Capacity Used
    Some Short-Term Capacity Options
     lease extra space temporarily
     staff second or third shift with temporary
    workers
     add weekend shifts
     alternate routings, using different work
    stations that may have excess capacity
     schedule longer runs to minimize
    capacity losses
    Some Short-Term Capacity Options
     leveloutput by building up inventory in slack
    season
     use multi-skilled workers to alleviate bottlenecks
     allow backorders to increase, extend due date
    promises, or have stock-outs.
     subcontract work
     QUERY??????
     THANK YOU

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