2 Capacity Strategy Resource Usage Market Competitiveness QualityPerformance objectivesDependabilitySupply NetworksProcess TechnologyDevelopmentand OrganizationSpeedFlexibilityCostResource UsageMarket CompetitivenessDecision areasIssues covered in this chapterCapacity (configuration)Issues include:Capacity levelsNumber of sitesSize of sitesLocation
3 What is Capacity Strategy? Configuring CapacityManaging Capacity ChangeType of CapacityOverall Level of CapacityLocation of CapacityTiming of ChangeMagnitudeofChangeIssues in capacity strategyLocation of changed capacity
4 Capacity Decisions at 3 Levels Strategic capacity decisionsHow much overall?How should the capacity be distributed?Location?Medium-term decisionsLevel/fluctuate?Staffing?Subcontracting?Short-term decisionsWhich resources to which tasks?Scheduling
5 Overall Level of Operations Capacity Forecast level of demandChanges in future demandUncertainty of future demandConsequences of over/under supplyAvailability of capitalCost structure of capacity incrementEconomies of scaleFlexibility of capacity provisionsOPERATIONS RESOURCESMARKET REQUIREMENTSOverall level of capacity
6 Overall Level of Operations Capacity Market SideForecast demand (long term)UncertaintyConsequences of over/under supplyChanges in demand – long vs. short term
7 Overall Level of Operations Capacity Supply SideAvailability of capital (debt/equity/dilution)Cost structure of capacity increments
8 Volume in thousands of units Forecast demand = 9000 units 24681012Costs / Revenue ($)Volume in thousands of unitsForecast demand = 9000 unitsCostRevenue
9 Overall Level of Operations Capacity Supply SideAvailability of capital (debt/equity/dilution)Cost structure of capacity incrementsEconomies of scale
10 Small Medium Large Output rate Minimum cost & optimal operating rate arefunctions of size of production unit.Average cost per unitSmallplantMediumLargeOutput rate
11 Overall Level of Operations Capacity Supply SideAvailability of capital (debt/equity/dilution)Cost structure of capacity incrementsEconomies of scaleFlexibility of capacity provision
12 Number & size of sites Questions Options Many small sites? NUMBER OF SITES and CAPACITY OF SITESLOCATIONOF SITESALLOCATION OF TASKSTO SITESLONG-TERM CAPACITY CHANGE STRATEGYMany small sites?Few larger sites?QuestionsOptionsSupply 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?
13 Number & size of sites Required service level Geographical distribution of demandEconomies of scaleSupply costsOPERATIONS RESOURCESMARKET REQUIREMENTSSize and number of sites
Your consent to our cookies if you continue to use this website.