Production capacity - Concept
It is the maximum feasible production rate. Answer the question How much can I produce? It implies that the operations manager must supply the necessary capacity to satisfy current and future demand to take advantage of opportunities.
production-capacity-and-dimension-of-plant-presentationAmount of resources that enter and that are available in relation to the production requirements during a certain period of time.
It includes inputs, products, a time dimension, measurement parameters according to each case and parameterization for efficient and inefficient use (relative)
Hierarchies in the production area
Capacity planning
- It is essential for the long-term success of an organization (Strategic decision).
"Excess" capacity can be just as fatal as "insufficient" capacity.
When trying to increase capacity it is necessary to take into account different aspects. The three most important are:
- Maintaining system balance Frequency of capacity increases Use of external capacity
Determination of capacity requirements
The demands of the different product lines, the capacities of each plant and the allocation of production in the plant network are taken into account by:
- Application of projection techniques 2. Calculation of equipment needs. Calculation of manpower needs 4. Projection of equipment and manpower needs for the planning horizon.
Capacity measurements
Utilization: extent to which equipment, space, or labor are currently used. It is expressed as a percentage as follows:
Utilization = average production ratex100% Ó
Maximum capacity
Capacity utilization rate = capacity used.
optimum level of operation
Bottleneck: operation that has the lowest effective capacity among all of the installation and thus limits the output of products from the system.
Peak capacity: the maximum production that can be achieved in a process or installation under ideal conditions.
Peak utilization = Average production rate x 100%
Peak capacity
Effective capacity: it is the maximum production output that a process or a company is capable of sustaining economically under normal conditions
Effective utilization = Average production rate x 100%
Effective capacity
Scale economics
It consists of reducing the unit cost of a good or service as the production rate increases. It is achieved by:
- Fixed cost dispersion. Reduction of construction costs. Cut of the cost of the materials and supplies purchased. Discovery of advantages in the process. The danger is in diseconomies of scale (inefficiencies in the process due to excessive size, loss of focus and increased unit costs).
Experience or learning curve
Turnover
Accumulated Production Volume
Obtaining
Experience in best
Production methods
Lower costs
CAPACITY STRATEGIES
- EXPANSIONIST OF WAITING AND VERINTERMEDIA
CONSIDERATIONS TO INCREASE CAPACITY:
- MAINTENANCE OF SYSTEM BALANCE FREQUENCY OF CAPACITY INCREASES CAPACITY FLEXIBILITY (EXTERNAL SOURCES) TARGETED CAPACITY
PRELIMINARY STEP
PROJECT SALES
TOOLS
PLANNING OF THE CAPACITY OF SERVICES
RELATIONS
CONCLUSION
Strategic capacity planning involves an investment-related decision. You must harmonize resource capacities with a long-term demand forecast. Some of the factors that should be taken into account in the selection of capacity increases for products and services are:
- the likely effects on economies of scale the effects of experience curves the effect of changing the focus of facilities and the balance between production stages the degree of flexibility of facilities and labor in services a key issue is the effect of capacity changes on the quality of service offered
The purpose is to provide an approach to determine the overall capacity level of capital intensive resources that best supports the company's competitive strategy.
Download the original file
