Lets discuss in detail about what is capacity planning, its classification and goals. The advantages of the match strategy in capacity planning. Apr 06, 2010 capacity planning is the process of determining the production capacity needed by an organization to meet changing demand for its products. The manufacturing or service capabilities of a company exist to serve its customers, and customer satisfaction depends on the companys timely response to their requests. Many plans are simply filed away because of their obsolescence after the first month or so. This includes the analysis of the currently available resource capacity, most. Chapter 05 strategic capacity planning for products and services 55 31. Strategic capacity planning for products and services chapter 5. Pdf strategic capacity planning in supply chain design for.
Group 1 process strategy and capacity planning by gabriella. Introduction in this paper, we consider optimal capacity investment decisions for a. Capacity planning capacity planning or aggregate planning is defined as the process of aggregating i. The community planning model is more grass roots, bottomup, consensus building. Feb 08, 2017 it is inefficient to have excess capacity that is sitting idle. Strategic planning edinburgh business school v using the course package it is widely accepted that strategic planning is extremely difficult to teach effectively. Amazon plans carefully its distribution capacity growth. The study recommends that, manufacturing firms should employ level capacity management strategies to ensure that they meet customers demand, while the. Pdf strategic capacity planning in supply chain design for a. This lesson will explain the four types of planning used by managers, including strategic, tactical, operational and contingency planning. It derives capacity links from the product structure to manage manufacturing.
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. Pdf strategic capacity planning in the aerospace industry. Robust capacity planning for the delivery of industrial. The plan failed, not because we failed to plan but we failed to. At the individual level, it is useful to adapt strategic planning tools and technique to ones own job and position. Strategic planning strategic planning toolkit by janet shapiro email. Strategic capacity planning in supply chain design for a new market opportunity article pdf available in international journal of production research 4211. Production capacity decisions for new, expanding, and existing. Chapter 05 strategic capacity planning for products and services 51 chapter 5 strategic capacity planning for products and services solutions 1. Strategic capacity planning for products and services chapter 5 strategic capacity planning for products and services key ideas 1.
Capacity planningcapacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. Mike explained that demand growth is largely located in highdensity population areas. Many planners might have a different interpretation of a particular term, especially if they primary use one model of strategic planning. The goal of strategic capacity planningis to achieve a match between the longterm supply capabilities of an organization and the predicted level of longterm demand. Pdf strategic capacity planning in supply chain design. About me adjunct lecturer at hks two decades experience in the nonprofit and philanthropic sector, designing and leading large global and national initiatives and organizations. It extends over a time horizon long enough to obtain those resourcesusually a year or more for building new facilities or acquiring new businesses. To implement effective strategic capacity management, a method has been developed to support decisionmaking on a strategic basis, consisting of process mapping, an evaluation framework and a master plan for technology acquisition and resource management. One of the main advantages of the match strategy for capacity planning is that it ensures the availability of sufficient capacity to meet the needs of the companys customers. Strategic capacity planning for products and services. Traditional capacity planning has limitations in todays dynamic environments, particularly from a strategic.
Capacity planning meaning, classification and its goals. Pdf we study strategic capacity planning in the semiconductor industry. Sep 30, 2010 simply put, strategic planning is clarifying the overall purpose and desired results of an organization, and how those results will be achieved. Three general strategies that may be employed in capacity planning are a lead strategy, a lag strategy, and an average strategy. Working with a major us semiconductor manufacturer on the configuration of. Anthony, author of planning and control systems 1965, one of the books that laid the foundation for strategic planning, didnt give his own definition of strategy. Instead, he used one presented in an unpublished paper by harvard colleague kenneth r. Capacity management in the industry typically entails longterm strategic planning and shortterm operational planning organized in a hierarchical manner. Terms, such as singleuse plans, continuing plans, policy. The presented paper focuses on strategic capacity planning and management.
The purpose of the present paper is to analyze the capacity management needs and propose a new capacity planning framework for a construction company. Managerial accountingmohammed alkraidees ipa saudi arabia 2. Thinking and planning strategically at the personal level requires similar inputs, questions, and approach, and develops your capacity to participate in planning efforts for teams and higherlevel entities. Strategic planning allows an organization to make fundamental decisions or choices by taking a longrange view of what it hopes to accomplish and how it will do so. To be able to evaluate the risk, however, requires a level of. Purpose of capacity plan provide the purpose of the capacity plan. Assess key qualitative issues for each alternative. That capability is an asset and it is not being fully used so it is costing money just sitting there. A general strategic capacity planning model under demand. Amazon uses population density maps overlaid with its dc locations.
The principles of capacity management page 5 of 18 2. Roundy,2 metin cakanyildirim3 1 department of industrial engineering and operations research, columbia university, new york, new york 10027. Companion document this companion document to the 2012 national performance measures instructions for goal 3 capacity building measures of the 20112015 strategic plan provides examples of planning and implementation of capacity building activities. Th e practice has become widespread for many reasons, but the chief one is the evidence that strategic planning typically works, and often works extremely well. Furthermore, the interest of this study is towards excavating the actual practises of manufacturing firms with regard to strategic capacity management.
Strategic planning is one of the most challenging and exciting exercises an organization can undertake. Repetitive focus process focus mass customization product focused this refers to a firms ability to produce highly customized goods and services in high volumes. Koren 1 department of mechanical engineering, the university of michigan, ann arbor, mi, usa 1. Project overview processes the main processes involved in capacity management are shown in figure 1. The most important requirement around the use of strategic. Data have been collected from malaysian manufacturing firms on their actual practices for strategic capacity management. It covers planning to do strategic planning, covering the background issues that need to inform. A general strategic capacity planning model under demand uncertainty woonghee tim huh,1 robin o. Strategic capacity planning process in construction business. Abstract english this paper introduces the strategic capacity planning prob lem in knowledge intensive organizations kios and proposes a classification. Capacity planning is a technique used to identify and measure overall capacity of the production. Glossary of strategic planning terms the following list includes many of the most common terms used in strategic planning.
The goal of strategic capacity planning is to achieve a match between the longterm supply capabilities of an organization and. Committing ourselves to the planning process is different than committing ourselves to a plan. Strategic planning assumes that certain aspects of the future can be created or influenced by the organization. The word capacity normally defined in business dictionary as specific ability of an entity person or organization or resource. In this paper, capacity planning in a telecommunications network is studied through the novel application of inventory control techniques aiming to meet the demand to a certain service level. Capacity planning is an important part of infrastructure and deployment planning a capacity plan supports the goal of optimum, and cost effective, provisioning of organizational resources and services by matching them to business demands. The inputs are demand forecasts, capacity constraints, strategic objectives. Capacity planning capacity planning is a longterm strategic decision that establishes a firms overall level of resources. The business environment has never changed as fast and as radically as at present. Pdf coordinating strategic capacity planning in the.
There are different ways to do that planning, depending on the purposes of the planning, the life cycle or stage of development of the organization, the culture of people in the organization, types. Capacity planning impacts all areas of the organization it determines the conditions under which operations will have to function flexibility allows an organization to be agile it reduces the organizations dependence on forecast accuracy and reliability many organizations utilize capacity cushions to achieve flexibility. The evaluate risk process has been placed in the centre, since it drives the need for the other major processes. Firms will be required to design flexible operations while implementing postponement products that are kept in. Assessing the capacity strategic options on capacity utilisation of. This is because, at the mba level, it is not sufficient to know about the subject it is necessary to be able to apply ideas in order to carry out strategic analysis of real problems. Strategic planning for production capacity emerald insight. Evaluate existing capacity and facilities and identify gaps.
Capacity is the upper limit or ceiling on the load that an operating system can handle. Capacity decisions have a real impact on the ability of. Defining the strategic capacity planning problem, identifying the most relevant characteristics and proposing a classification scheme is the first step towards the design of a general solving methodology and the development of specific solving procedures for each case. Pdf this paper addresses the problem of supply chain design at the strategic level when productiondistribution of a new market opportunity. Pdf capacity planning in a telecommunications network. Capacity is the rate of productive capability of a facility.
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