Assessing the capacity strategic options on capacity. Exam 2014 questions exam 2014 questions lecture notes, operations management, materials requirement planning and enterprise resource planning, prof. In operations, management capacity is referred as an amount of the input resources available to produce relative output over period of time. So much so, capacity planning is sometimes used synonymously with capacity management.
Case studies and examples organizing and planning for. Lecture 5 planning and control 10 the nature of planning. Many organizations become involved with capacity planning due to changes in demand, technology, the environment, etc. Measurement of capacity planning the capacity of the manufacturing unit can be expressed in number of units of output per period. Jul 25, 2019 capacity planning is part of the overall capacity management cycle. Define and measure capacity and appreciate the factors that influence it. Organisations willing to succeed in global competition have to integrate their internal and external processes. Production has no meaning unless its products can be sold at a remunerative price. Increases in machinery costs in the mid 1970s necessitated one cigarette manufacturer to rethink its. This book provides good practical approach on how to implement the process, with a view to bringing its benefits to the organization. Developing decisionmaker support for management and operations at metroplan orlando, case study html, pdf 1. Demand forecasting capacity planning capacity requirement planning facility location facility layout.
Pay attention to the inputs to capacity planning and the determinants and steps in the capacity planning. Wally whistance smith lecture notes, operations management, lecture week prof. Production and operations management notes for mba pdf. This includes capacity forecasting, planning, monitoring and performance analysis. The job of operations management om consists of all the activities involved in transforming a product idea into a finished product. Operations management capacity planning and control. Capacity planning in production and operation management. Capacity planning capacity can be defined as the maximum output rate that can be achieved by a facility. If you have some experience with capacity management. Lectures notes on production and operation management. No simple standard equation exists to tell you how much capacity you need right now or in the future or when exactly your operations management should add capacity. Strategic capacity planning process in construction business. Strategy, planning, and operations it capacity planning capacity planning it capacity planning itil guerrilla capacity planning cases in operations management.
If youre new to capacity management, it might make sense to start with capacity planning. Capacity decisions need acute and careful attention by concerned persons as almost everything of the operations is related with capacity. Capacity planning is vital in operations management. This especially includes planning and production control ppc processes.
How to develop a capacity planning strategy, including common techniques, tools, mib variables, and thresholds used in capacity planning. Capacity measures the rate that the operation can transform inputs into outputs. Lecture notes, operations management, chapter 1, 2, 4, 6. The article discusses the objectives, advantages, disadvantages and implementation of materials and resource requirement planning. Evaluate and apply the different strategies for matching capacity with demand in the short.
Often the costs associated with excess capacity are not high, and so little energy is expended on determining least. Capacity planning is the process of determining the production. Capacity concerns for your operations management dummies. They tackled the role of capacity management in operations management today including the cloud. In addition, operations managers are involved in planning and controlling the systems that produce goods and services. The importance of production and operation management is the process that combines and transforms various resources used in the production operation subsystem of the organization into valueadded productsservices in a controlled manner as per the policies of the organization. Excel models for business and operations management. Building customer value through worldclass operations pwc capacity management itil capacity management guide for allhazard emergency operations planning supply chain strategy planning and operations operations management sustainability and supply chain management. Operations management is the management of processes that transform inputs into goods and services that add value for the customer. Capacity, bottleneck, process capacity, flow rate and utilization. Learn vocabulary, terms, and more with flashcards, games, and other study tools.
Capacity planning is essential to be determining optimum utilization of resource and plays an important role decisionmaking process, for example, extension of existing operations, modification to product lines, starting new products, etc. This usually means deciding how the operation should react to. Capacity is the rate of productive capability of a facility. The challenges of planning service capacity important factors in planning service capacity. Us capacity planning and its implications on the infrastructural development needs of some selected. The set of interrelated management activities which are involved in manufacturing certain products is called production management and for service management, then corresponding set of management activities is called as operation management. Capacity planning unit introduction capacity planning is vital in operations management. Capacity planning is to be carried out keeping in mind future growth and expansion plans, market trends, sales forecasting, etc. Time and capacity are the two main constraints in capacity management.
Thanks for explaining the reasons why capacity planning is the secret to successful projects, its very helpful for me to make a better plan and i appreciate for sharing this wonderful piece of writing, it was very helpful, the points that helped me greatly were capacity planning, planning and time management. Location timing of demand speed of delivery or customer waiting time demand management strategies pricing promotions discounts. This can give an operation a number of problems when attempting to plan capacity. Material planning smoothens capacity utilization and allocates correct time to products as per demand forecast. Inventory planning and control need for products and services at a page 340 10 the nature of planning and control 11 capacity planning and control 12 inventory planning and control operations management. Operations managers, with an unstable and uncertain demand forecasts are faced. Optimal pricing and capacity planning in operations management. Home homework help operations management production planning capacity planning capacity planning the capacity of a facility of an industrial unit is planned keeping in mind the current. Generally, the capacity of plant is limited by the level of current demand. Capacity planning is the first step when an organization decides to produce more or new products.
Assess the difficulties of matching capacity to demand. Planning is a prominent piece of the capacity management puzzle. Wally whistance smith lecture notes, operations management. Title how to initiate a capacity planning and management process for a rapid deployment unit of a security service company thesis supervisor anasse bouhlal month and year november 2011 pages 77 abstract support services group ltd. Capacity decisions have a real impact on the ability of the organizationto meet future demands for products and services. And they talked about the role that teamquest capacity management solutions play at helpsystems. What is capacity management in operations management. Module 5 capacity planning inventory operations management. If input information is not correct than output for material planning. They include strategic or rough cut capacity planning, aggregate capacity planning, finite capacity planning also known as production scheduling and capacity. Globalizationhas increased the importance and the complexity of capacity decisions. It is always m processing time with m being the number of resources e. Measurement of capacity planning in production and.
Operations management is a vital part of an organization to achieve success because. Complexity, fit, strong inference, organization theory, mixedmethods research. Aggregate capacity management aims to balance capacity and demand in a cost. Introduction to operations management boundless business. In other words, operations managers manage the process that transforms inputs into outputs. Determining the correct capacity level for your business at any given time to satisfy customer demand takes a great deal of assessment and careful consideration. The capacity of teams, business capabilities and processes. Organizations have capacities or limits that their system can handle.
Materials and resource requirement planning objectives. Operations management capacity planning and control notes and revision. However, capacity strategic options chosen are primarily a function of demand. Capacity is usually a major determinant of initial cost. Thats the topic of a recent webinar with tom huntington and per bauer. Global journal of management and business research volume xii issue xxiii version i 2 20 12 eary 64 2012 global journals inc. Capacity management is the process of planning the resources required to meet business demands.
Finlay department of management studies, loughborough university of technology. Sometimes called production management, the field is crossfunctional, tying in with other departments. If, for example, one worker needs 40 seconds to put together a sandwich, the capacity of this station is 140 per second or 1,5 sandwiches per minute. In operations management there are various capacity planning practices adapted by firms, be they in manufacturing or service. Properly managed capacity can have great benefits for the small business. An operation may experience many changes and fluctuations in the. Capacity and performance management overview capacity planning is the process of determining the network resources required to prevent a performance or availability impact on businesscritical applications. As stated at the top of this blog, capacity management includes planning activities, management activities, and optimization.
The goal of operations management is to maximize efficiency while producing goods and services that effectively fulfill customer needs. The paper examines the capacity profile and proposes a strategy for capacity building. Overview 1 a systems view of business operations 2 a manufacturing business model 3 finance and cost accounting 3 the marketing function 5 the production function 5 management decisionmaking 12 enterprise resource planning erp 15 references and further reading 16. Capacity and performance management best practices, including whatif analyses, baselining, trending, exception management, and qos management. Pdf strategic operations management radhitya wirawan. The term operations management encompasses planning, implementing, and supervising the production of goods or services. Capacity planning is described as matching the capabilities of an organization with the predicted level of future demand. Effective capacity is the optimum production level under predefined job and workschedules, normal machine breakdown, maintenance, etc. Capacity planning practices and operational performance of. Strategic capacity planning for products and services.
Productsgoods boiler with a specific capacity, constructing flats. A technique used to identify and measure overall capacity of production is. They are features of fastpro, a software which has toc as background, but in a way that it can be used. The purpose of the present paper is to analyze the capacity management needs and propose a new capacity planning framework for a construction company. Methods and tools for dynamic capacity planning and control are discussed on this paper. Capacity planning is done on the basis of projections for future product demand, labour and equipment requirements. Demand management is not a one size fits all solution.
Design and simulation of a capacity management model. Strategic capacity planning for products and services read the chapter five summary. The strategic capacity planning undertaken by organization for 2 to 3 years of a time frame is referred to as medium term capacity planning. The process of planning and managing the overall capacity of an organizations resources.
Introduction capacity planning decisions are important to any industry, especially to health care industry because not only it relates to the management of highly specialized and costly resources. Start studying operations management chapter 5strategic capacity planning. Capacity planning and control is the task of setting the effective capacity of the operation so that it can respond to the demands placed upon it. This can happen at three levels in an organization. Operations is one of the three strategic functions of any organization. Optimal pricing and capacity planning in operations. How to initiate a capacity planning and management process for a rapid deployment unit of a security. Measurement of capacity planning in production and operations. Definition, principles, activities, trends since all companies have operations, i. The facility may be an entire organization, a division, or only one selection from operations management. Case studies advancing planning for operations best practices illustrating the benefits of planning for operations.
The concept of capacity was identified as policy guidelines in the work of glueck, kaufman, and wallect 1984. Now customize the name of a clipboard to store your clips. Another is the need to disclose proprietary information. Clipping is a handy way to collect important slides you want to go back to later.
Capacity planning and management learning outcomes after reading this chapter you should be able to. It is conventional for a manufacturing company to equip itself to cope with a demand greater than that considered most likely to arise. Nov 05, 2015 includes topics such as, defining and measuring capacity determinants of effective capacity evaluating capacity alternatives make or buy decisions costvolume analysis planning service. Module 5 capacity planning free download as powerpoint presentation.
Material planning is highly dependent on inputs it receives from other systems or department. Operations management an overview 7 quantity for production longrange capacity planning forecasting longterm future capacity demand economies and diseconomies of scale developing capacity. Generally the required outputs during manufacturing resource constraints are met by working overtime or redeploying the workforce. Capacity management is incomplete without business driven capacity planning. Tactical planning is a middlelevel activity connecting strategic planning and operations control in which the basic problem to be solved is the allocation of resources i. Operations managers have responsibilities in both strategy and daytoday production, in either manufacturing or services.
From a technology point of view, capacity management is the management of current it capacity to meet the present and future requirements of any business efficiently in terms of cost and time. The capacity of your company to meet expected demand should be measured in both the shortterm and the longterm. Operations management chapter 5strategic capacity planning. Capacity planning can be difficult at times due to the complex influence of market forces and. Inefficient management due to largeness of operation and resultant lack of. Operations management capacity planning supply chain management. The capacity can be calculated for every station in a business process. Capacity planning is not necessary to predict the future infrastructural needs of the higher institutions in kogi state. Sep 10, 2017 capacity management is the process of planning the resources required to meet business demands. Material and manufacturing planning system is one of the key essentials of a production plan. Optimised allocation of the production resources and quick.
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