Plannimng and Control, Capacity Management

OBJECTIVES OF CAPACITY PLANNING
Quality Speed Dependability Flexibility Cost
Monitor and control continually
Decide how you are going to match your capacity plan with the forecast demand and the operations objective: Level, chase or demand management plans
Know your current capacity and how it may flex to the demand fluctuations. • How much volume of an operation • Constraints of capacity
• Understand the capacity variables i.e. machines, staff, facilities and how to calculate their respective designed & effective capacity and actual outputs of an operation, and what do do to make improvements on utilisation and efficiency of an operation
The maximum level of value-added activity that an operation, or process, or facility is capable of over a period of time.
CAPACITY CONSTRAINTS
Most organisations are characterised by having several activities that make up the process. Any one of these activities can be a constraint.
Supermarket
If full will go elsewhere
Parking
Floor space
Checkout
Insufficient checkouts will cause queuing
Textile manufacturer
Any stage within process at ‘ceiling’ will constrain the maximum capacity
Capacity management is how an operation reconciles demand for a product or service whilst meeting customer expectations of quality, speed, dependability, flexibility and cost. Capacity management can mean different things to the manufacturing and service industries.
Below ‘ceiling’ to deal with unexpected demand i.e. weather
The effects of long, medium and short term capacity planning
• Long-term capacity planning concentrates on long-tern changes in demand and the alternative strategies for dealing with these changes. These include expansion and major change management programmes.
CAPACITY PLANNING & CONTROL
MATCHING SUPPLY WITH DEMAND (Slack et al, Chapter 11)
‘Get the balance between capacity and demand right and the operation can satisfy its customers effectively. Get it wrong and it will fail to satisfy demand and have excessive costs’ Slack et al, (2007)
AGGREGATE AND DISAGREGATE CAPACITY
If all this seems very approximate, remember that most operations have sufficient experience of dealing with aggregated data and knowledge of likely demand
Some organisations operate below their maximum capacity, either because there is insufficient demand or as a deliberate policy so that operations can respond quickly to new orders. Some like emergency services operate above maximum demand.
• Medium & short-term capacity planning is the shorter time-scale capacity planning decisions that are largely within the constraints of the physical capacity limits set by the operations long-term capacity strategy. • Medium-term capacity planning is about 1) demand forecasts between 2-18 months ahead and 2) how to respond to demand fluctuations over a shorter time scale. (planners use aggregated forecasts of demand and therefore the aggregated capacity to cope with the forecast demand) • Short-term capacity planning is about making adjustments, which enable operations to flex output for a short period, either on a predicated basis or at short notice. (seasonality demand, average demand forecasts) • Aggregated demand planning and capacity a term used to indicate mediumterm capacity planning that aggregates different products and servicers in order to get a broad view of demand and capacity. Its a useful first stage in planning and control.
Buying a 1000 per hour capacity press machine. Multiplex cinema of 10 screens with 250 seats = 2500 saleable seats
Average output • Day shift 8 hours = 6000 achieved is 750 per hour. • Night shift 12 hours = 9000 • Total per day = 15000 Average capacity used is 2000 customers a day Maximum capacity of 3 sessions per screen = 7500 customers per day
Some parts of an operation are below capacity, whilst other parts at their capacity ‘ceiling’. The later can be capacity constraints for the whole process.
DEFINING CAPACITY
The term capacity is used to describe many things. It is most often quoted in a static context. Volume of an operation over time.
Static: volume (physical sense of a fixed volume) Building a 500 capacity car park. Dynamic: time period Average capacity used is 450 cars cars per day Maximum processing capacity • 9am-5pm office workers 500 cars • 5pm – 2am socialising average stay 3 hours = 1500 cars per • Weekend shopping 9am – 5pm average stay 2 hours = 2000 • Maximum weekly capacity = 14000