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Swapnil S. Shahade
PRN :- 15070142417
• Capacity
• Capacity Planning
• Strategic Capacity Planning
Contents
• Types of Capacity Planning
• Hierarchy Of Production Decisions
• Factors Affecting Capacity Planning
• Aggregate Planning
• Production Planning and Control
• Material Requirement Planning
• Waiting Line (Queue) Management
• Real Life Example On Queue Management
Introduction
‘Capacity Planning’ can be the competitive advantage
that can help an organization to succeed and help fulfil the objectives and strategies of
the organization.
Let us now learn about
‘Capacity Planning’ in detail.
Capacity
‘Capacity’ is the ability of a given system to produce output within the specific time period.
‘Management Capacity’ is referred as the amount of input resources available to produce relative output over period of time.
‘Capacity’ is referred to as maximum production capacity, which can be attained within a normal working schedule.
Capacity Planning
• ‘Capacity Planning’ is essential to be determine the optimum utilization of resources and plays an important role in decision-making process such as for, extension of existing operations, modification to existing product lines, starting new products, etc.
Strategic Capacity Planning
• ‘Strategic Capacity Planning’ is crucial as it helps the organization in meeting the future requirements of the organization.
• Planning ensures that operating costs are maintained at a minimum possible level without affecting the quality.
• It ensures that the organization remain competitive and can achieve its long-term growth plan.
A technique used to identify and measure overall capacity of production
Types Of Capacity Planning
The three types of capacity planning based on goal are:
Lag Strategy Planning
Lead Capacity Planning
Match Strategy Planning
Types Of Capacity PlanningCapacity planning based on the ultimate goal of to meet the current and future level
of the requirement at a minimal wastage
Adding capacity in anticipation of an increase in demand Aggressive strategy with the goal of luring customers away from the
company's competitors by improving the service level and reducing lead time. Strategy aimed at reducing stock out costs.
Adding capacity only after the organization is running at full capacity orbeyond due to increase in demand
Adding capacity in small amounts in response to changing demand in themarket
This is a more moderate strategy.
Long Term Capacity
Medium Term Capacity
Short Term Capacity
Types Of Capacity Planning
Capacity planning based on the timeline
Types Of Capacity Planning
Capacity planning based on the timeline
Long range capacity of an organization is dependent onvarious other capacities like design capacity, productioncapacity, sustainable capacity and effective capacity
The strategic capacity planning undertaken by organizationfor 2 to 3 years
The strategic planning undertaken by organization for a dailyweekly or quarterly
Factors Affecting Capacity Planning
There are several factors that affect the efficiency and effectiveness of capacity planning such as follows:
External Structure (such as policies, safety regulations etc.)
Operational Structure (such as scheduling, quality assurance etc.)
Human Capital (such as job design, compensation etc.)
Production Facility (such as layout, design, and location etc.)
Hierarchy Of Production Decisions
Forecasts of future demand
Long Range Capacity Planning
Aggregate Planning
Master Production Schedule
Material Requirements Planning System
Detailed Job Shop Schedule
Aggregate Planning
• ‘Aggregate Planning’ is the process of working out production requirements for a medium range by working backwards from the final sales unit to raw materials required.
• ‘Aggregate Planning’ is an operational activity critical to the organization as aims at balancing the long-term strategic planning with short term production success.
Overview of Production Planning and Control
Factors affecting Production Control‘Production Control’ cannot be the same across all of the organization. ‘Production Control’ is dependent upon the following factors:
Nature of Production (job oriented, service oriented, etc.)
Nature of Operation
Size of Operation
Material Requirement Planning
One of the crucial components of a production plan is material and manufacturing planning system.
‘Material Requirement Planning’ plays a pivotal role in assembly-line production.
Waiting Line (Queue) Management
‘Queue Management’ deals with cases where the customer arrival is random; therefore, service rendered to them is also random.A service organization can reduce cost and thus improve profitability by efficient queue management.
Service Configuration
• Another aspect of waiting line management is the service configuration.
• There are four types of service configuration, and they are as follows:o Single Channel, Single Phaseo Single Channel, Multi Phaseo Multi Channel, Single Phaseo Multi Channel, Multi Phase
Let us now look at a real life example to
understand the characteristics of a
waiting line in different situations.
Real Life Example
Situation #1: Doctor’s Office
Doctor’s Office
The following are the characteristics of the waiting line (queue) in a Doctor’s Office:
• Arrivals: The ‘Arrivals’ here are the individual patients who come to visit the doctor for treatment.
• Arrival Process: The patient’s arrival is in single. • Pattern of Arrivals: The patient’s arrival is scheduled
due to prior appointment with the doctor’s office.• Behavior of the Arrivals: The Arrivals in the doctor’s
office join the queue, and wait until they are served.• Channel: This is a single channel system where the
individual doctor is the server who will cater to the needs of the arrivals (patients).
• Phase: This is a single step service process where a single step is involved in getting service.
• Queue Discipline: The patients are served in the order of their appointment time as well as their presence at the time of appointment at the doctor’s office.
• Service Configuration: Single Channel, Single Phase