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