Capacity Management Flashcards
Define capacity management
The activity of understanding the nature of an operations supply and demand
Strategies of capacity management
They are dependant on SHORT and LONG term outlooks regarding e.g. production volume
Strategies of capacity management - Short Term
Reactive time scale - up to 3 months
Ads= flexible resources Dis = expensive in short term In readjusting resources
strategies of capacity management - Long term
Time scale - 12-18 months
Investment decisions tend to be more significant and will link to the strategy of the operation
Ads: many more options available to consider
Possibilities for increases far greater
Dis = will take long time to implement and difficult to reverse
Examples of strategy of management - short term
Christmas period - Temp staff for increased demand to keep service levels high + over time for existing staff / multi skilled staff reallocated to different teams
Examples of Stategies of capacity management - Long term
New trained full time staff or “lay off” existing staff
New processes that may be faster
Information systems and technology can be applied to increase efficiency and capacity
Adjustments - define
Depends on nature of the individual process is effected by ability to utilise the adjustments
Examples of adjustments
Fast food restaurants can hire and fire staff, as skill set is low and doesn’t take time to train and hire new staff
Whereas hospitals can’t use that process as the staff have a unique skill set and as a result can be easily replaced
Examples of adjustments 2
Car manafacturers would find it hard to replace engineers as the skill set is very high.
However due to to increase in technology if the operation were to invest in new technology some jobs would be replaced by machinery which would increase capacity and provide flexibility
Units of analysis
Organisations sometimes have problems in measuring capacity because the nature of its product and services may vary significantly
Capacity is often examined at the aggregate level
Aggregated just means that different products and services are bundled together in order to get a broad view of demand and capacity
