We think you have liked this presentation. If you wish to download it, please recommend it to your friends in any social system. Share buttons are a little bit lower. Thank you!
Presentation is loading. Please wait.
Published byCynthia Dwinell
Modified over 2 years ago
© Nigel Slack and Michael Lewis 2003 Quality Performance objectives Dependability Supply Networks Process Technology Development and Organization Speed Flexibility Cost Resource Usage Market Competitiveness Decision areas Issues covered in this chapter Capacity (configuration) Issues include: Capacity levels Number of sites Size of sites Location
© Nigel Slack and Michael Lewis 2003 Capacity Strategy Configuring Capacity Managing Capacity Change Type of Capacity Overall Level of Capacity Location of Capacity Timing of Change Magnitude of Change Issues in capacity strategy Location of changed capacity
© Nigel Slack and Michael Lewis 2003 Efficiency Actual output Effective capacity % = = = Efficiency Actual output Effective capacity % = = = Ice Cream DivisionCanned Food Division Total Capacity 7896 hrs Planned Loss 3762 hrs Effective Capacity 4134 hrs Actual Output 3724 hrs Avoidable Loss 410 hrs Total Capacity 7896 hrs Planned Loss 2459 hrs Effective Capacity 5437 hrs Actual Output 3724 hrs Avoidable Loss 815 hrs Utilization Actual output Total capacity % = = = Utilization Actual output Total capacity % = = = Utilization and efficiency measures for two divisions of a food processing company
© Nigel Slack and Michael Lewis 2003 Forecast level of demand Changes in future demand Uncertainty of future demand Consequences of over/under supply Availability of capital Cost structure of capacity increment Economies of scale Flexibility of capacity provisions Some factors influencing the overall level of capacity OPERATIONS RESOURCES MARKET REQUIREMENTS Overall level of capacity
© Nigel Slack and Michael Lewis 2003 Issues include….. a LONG-TERM CAPACITY CHANGE STRATEGY NUMBER OF SITES LOCATION OF EACH SITE ALLOCATION OF TASKS TO EACH SITE CAPACITY OF EACH SITE
© Nigel Slack and Michael Lewis 2003 Questions: Who should be involved in these decisions? How does the company make this type of decision? NUMBER OF SITES and CAPACITY OF SITES LOCATION OF SITES ALLOCATION OF TASKS TO SITES LONG-TERM CAPACITY CHANGE STRATEGY Many small sites? Few larger sites? QuestionsOptions Supply side dominated? Demand side dominated? All sites make all products/services? Each site focuses on a few products/ services? Capacity leads demand? Capacity lags demand?
© Nigel Slack and Michael Lewis 2003 Why is capacity strategy important? Without an appropriate capacity strategy operations will always be struggling to supply markets in a competitive manner Getting capacity strategy right is the starting point for developing competitive operations
© Nigel Slack and Michael Lewis 2003 LONG-TERM CAPACITY CHANGE STRATEGY NUMBER OF SITES LOCATION OF EACH SITE CAPACITY OF EACH SITE ALLOCATION OF TASKS TO SITES What performance measures will all these decisions have a major impact on ? ? How should one judge a capacity strategy ?
© Nigel Slack and Michael Lewis 2003 Should capacity lead or lag demand ? Capacity leads demand Volume Time What competitive objectives will be affected? Capacity lags demand Volume Time Demand Capacity
© Nigel Slack and Michael Lewis 2003 The three options ….. Time Demand Capacity Volume Time Capacity Leading Strategy Demand Capacity Volume Time Capacity Lagging Strategy Demand Capacity Volume Time Capacity Smoothing Strategy
© Nigel Slack and Michael Lewis Costs / Revenue ($) Volume in thousands of units Forecast demand = 9000 units Cost Revenue Cost, volume, profit illustration
© Nigel Slack and Michael Lewis Unit cost (total cost / volume) Volume in thousands of units (a) Nominal capacity limit Unit cost (total cost / volume) Volume in thousands of units (b) Diseconomies of scale kick in Unit cost curve
© Nigel Slack and Michael Lewis 2003 Physical capacity of facilities Effective Capacity Demand Volume Time Cash flow with extended physical capacity Cash flow with two identical capacity increments Cumulative cash flow Time Expanding physical capacity in advance of effective capacity can bring greater returns in the longer term
© Nigel Slack and Michael Lewis 2003 Required service level Geographical distribution of demand Economies of scale Supply costs Some factors influencing the number and size of sites OPERATIONS RESOURCES MARKET REQUIREMENTS Size and number of sites
© Nigel Slack and Michael Lewis 2003 Required service level Suitability of site Image of location Resource costs Land and facilities investment Resource availability Community factors Some factors influencing the location of sites OPERATIONS RESOURCES MARKET REQUIREMENTS Location of sites
© Nigel Slack and Michael Lewis London (city) Hong Kong New York (midtown) Singapore Stockholm Amsterdam Madrid Office rents in various cities ($000 per square metre, January 1999) Source: Richard Ellis, The Economist
© Nigel Slack and Michael Lewis Unit labour costs in various countries (1998) (includes effects of currency exchange rates and productivity) Denmark Britain Japan France Germany Sweden Netherlands Spain Source: OECD, The Economist United States = 100
© Nigel Slack and Michael Lewis 2003 Location ALocation B Location of operation Costs / Revenue Revenue Costs (a) Location concerned with profit maximization; (b) Location concerned with cost minimization Location A Location of operation Costs / Revenue Revenue Costs Fast food restaurant Electronics manufacturer (a) (b)
© Nigel Slack and Michael Lewis m 3m 2m 1m $US Monthly volume (kg) Current volume Revenue 3 Brayford facilities 1 Bi-line 8 facility & 1 Brayford facility Cost-volume-profit curves for two alternative capacity strategies
Operations Strategy Capacity Strategy. Quality Performance objectives Dependability Supply Networks Process Technology Development and Organization Speed.
Capacity strategy. Some factors influencing the overall level of capacity Forecast level of demand Consequences of over/under- supply Availability of.
MGT 563 OPERATIONS STRATEGIES Dr. Aneel SALMAN Department of Management Sciences COMSATS Institute of Information Technology, Islamabad.
Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Chapter 6 Supply network design.
The supply network perspective, pp Deciding whether to outsource + table 6.1, pp The location of capacity, pp Weighted-score.
Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston Chapter 6 Supply network.
Halil SATIK Industrial Engineering Department, Dokuz Eylul University, Turkey.
© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J S 7-1 Operations Management Capacity Planning Supplement 7.
Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Chapter 11 Capacity planning.
1 EMBA-2, BUP EO Strategic Capacity Planning.
Business, Operations and Supply Chain Strategy (BOSCS) Business and Operations Strategy: Strategic Management of Operations Capacity.
McGraw-Hill/Irwin Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. 5 Capacity Planning For Products and Services.
4-1 McGraw-Hill/Irwin Operations Strategy Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Capacity Strategy Chapter 4.
Operations Management For Competitive Advantage © The McGraw-Hill Companies, Inc., 2001 C HASE A QUILANO J ACOBS ninth edition 1 Strategic Capacity Management.
Facility Planning: Capacity. Capacity Planning Interrelated facility planning decisions: 1.Number of facilities and general type 2.Capacity 3.Locations.
© Nigel Slack and Michael Lewis 2003 Quality Performance objectives Dependability Process Technology Development and Organization Speed Flexibility Cost.
Capacity Planning. How much long-range capacity is needed When more capacity is needed Where facilities should be located (location) How facilities should.
Strategic Capacity Planning for Products and Services.
5-1Capacity Planning William J. Stevenson Operations Management 8 th edition.
© Nigel Slack and Michael Lewis 2003 The three levels of operations strategy process Level 1 - Fit Align resources with requirements Level 2 - Sustainability.
Muhammad Salim Martak Peter Ronald Reonard Chandra Effendy.
Capacity Planning For Products and Services. What kind of capacity is needed? How much capacity is needed? When more capacity is needed? Where.
Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston Chapter 11 Capacity planning.
Facilities and Aggregate Planning. A digression I am not an advocate of gambling, but use an example here that you might draw on later. Say I have a coin.
Supply & Costs of Production. Diminishing Marginal Returns As more and more of a variable input is added to a fixed input, the resulting additional output.
Operations Fall 2015 Bruce Duggan Providence University College.
C A P A C I T Y Dr. Dewi Nusraningrum, M.Si. CAPACITY PLANNING - Capacity is the maximum rate of output for a facility. - Capacity planning is central.
Jones & Robinson: Operations Management All operations need to know the likely customer demand for their goods or services on any given day, week or year.
Chapter 10 The Foreign Exchange Market 1. What is the foreign exchange market? The foreign exchange market is a market for converting the currency of.
Adeyl Khan, Faculty, BBA, NSU Ceiling on the amount of load Capacity at NSU.
CHAPTER 16 Global Manufacturing and Materials Management.
Location Strategy and Layout Strategy 19 July 2001.
Capacity planning and control chapter -11. What is capacity? Capacity is the maximum amount of work that an operation can do over a specific period of.
Cours GOL 460 Chaînes logistiques et d´approvisionnement Laboratoire 1 (Solution)
CHAPTER 4 BUILDING COMPETITIVE ADVANTAGE THROUGH FUNCTIONAL-LEVEL STRATEGIES.
OPERATIONS MANAGEMENT. OPERATIONS MANAGEMENT 1 Where to produce? What is the best location for the business? In the case of manufacturing, this may.
PowerPoint presentation to accompany Heizer/Render - Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc.,
Chapters (8) Perfect Competition (8) Monopoly (8).
1 Intermediate Microeconomics Equilibrium. 2 Partial Equilibrium We have now derived both the market demand curve (Q d (p)) and market supply curve (Q.
OPERATIONS REVIEW Year 12 Business Studies. Role of Operations Management Operations is the key business function concerned with the transformation of.
McGraw-Hill/Irwin Copyright © 2011 The McGraw-Hill Companies, All Rights Reserved Chapter 4 Strategic Capacity Management.
The Global Economic Environment Chapter 2 Global Marketing.
Capacity Planning Capacity Planning Pertemuan 04 Mata kuliah: J Manajemen Operasional Tahun: 2010.
1-1 1 McGraw-Hill/Irwin ©2009 The McGraw-Hill Companies, All Rights Reserved.
McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved. 1.
Slack, Chambers and Johnston, Operations Management 5 th Edition © Nigel Slack, Stuart Chambers, and Robert Johnston 2007 Chapter 1 What is operations.
13-1 What Is Strategy? A firm’s strategy refers to the actions that managers take to attain the goals of the firm Firms need to pursue strategies that.
Chapter 6 Office & Industrial Property. Major Topics Real Estate Principles for the New Economy: Norman G. Miller and David M. Geltner Office Property.
© 2016 SlidePlayer.com Inc. All rights reserved.