Developing decisionmaker support for management and operations at metroplan orlando, case study html, pdf 1. Case studies and examples organizing and planning for. Capacity decisions have a real impact on the ability of the organizationto meet future demands for products and services. Location timing of demand speed of delivery or customer waiting time demand management strategies pricing promotions discounts. Module 5 capacity planning inventory operations management. Introduction capacity planning decisions are important to any industry, especially to health care industry because not only it relates to the management of highly specialized and costly resources. Capacity planning is essential to be determining optimum utilization of resource and plays an important role decisionmaking process, for example, extension of existing operations, modification to product lines, starting new products, etc. Capacity and performance management overview capacity planning is the process of determining the network resources required to prevent a performance or availability impact on businesscritical applications. If, for example, one worker needs 40 seconds to put together a sandwich, the capacity of this station is 140 per second or 1,5 sandwiches per minute. Globalizationhas increased the importance and the complexity of capacity decisions. This usually means deciding how the operation should react to. Learn vocabulary, terms, and more with flashcards, games, and other study tools.
Optimal pricing and capacity planning in operations management. Capacity is usually a major determinant of initial cost. The importance of production and operation management is the process that combines and transforms various resources used in the production operation subsystem of the organization into valueadded productsservices in a controlled manner as per the policies of the organization. Define and measure capacity and appreciate the factors that influence it. Demand management is not a one size fits all solution. Capacity planning practices and operational performance of. Often the costs associated with excess capacity are not high, and so little energy is expended on determining least.
Exam 2014 questions exam 2014 questions lecture notes, operations management, materials requirement planning and enterprise resource planning, prof. The challenges of planning service capacity important factors in planning service capacity. Operations management capacity planning and control notes and revision. Inventory planning and control need for products and services at a page 340 10 the nature of planning and control 11 capacity planning and control 12 inventory planning and control operations management.
What is capacity management in operations management. Assessing the capacity strategic options on capacity. Capacity management is incomplete without business driven capacity planning. Operations management capacity planning and control.
Lecture 5 planning and control 10 the nature of planning. Pay attention to the inputs to capacity planning and the determinants and steps in the capacity planning. Operations managers, with an unstable and uncertain demand forecasts are faced. Operations managers have responsibilities in both strategy and daytoday production, in either manufacturing or services. Operations is one of the three strategic functions of any organization. In operations, management capacity is referred as an amount of the input resources available to produce relative output over period of time.
No simple standard equation exists to tell you how much capacity you need right now or in the future or when exactly your operations management should add capacity. The article discusses the objectives, advantages, disadvantages and implementation of materials and resource requirement planning. The capacity of your company to meet expected demand should be measured in both the shortterm and the longterm. Complexity, fit, strong inference, organization theory, mixedmethods research. Organizations have capacities or limits that their system can handle.
The capacity of teams, business capabilities and processes. Measurement of capacity planning the capacity of the manufacturing unit can be expressed in number of units of output per period. Properly managed capacity can have great benefits for the small business. Operations management chapter 5strategic capacity planning. Measurement of capacity planning in production and. Production and operations management notes for mba pdf.
Jul 25, 2019 capacity planning is part of the overall capacity management cycle. If youre new to capacity management, it might make sense to start with capacity planning. The paper examines the capacity profile and proposes a strategy for capacity building. The set of interrelated management activities which are involved in manufacturing certain products is called production management and for service management, then corresponding set of management activities is called as operation management. As stated at the top of this blog, capacity management includes planning activities, management activities, and optimization. Lecture notes, operations management, chapter 1, 2, 4, 6. Production has no meaning unless its products can be sold at a remunerative price. Sometimes called production management, the field is crossfunctional, tying in with other departments. Material planning is highly dependent on inputs it receives from other systems or department. In other words, operations managers manage the process that transforms inputs into outputs. Planning is a prominent piece of the capacity management puzzle. Capacity planning is the process of determining the production. Inefficient management due to largeness of operation and resultant lack of. Generally the required outputs during manufacturing resource constraints are met by working overtime or redeploying the workforce.
Operations management capacity planning supply chain management. So much so, capacity planning is sometimes used synonymously with capacity management. Capacity, bottleneck, process capacity, flow rate and utilization. This book provides good practical approach on how to implement the process, with a view to bringing its benefits to the organization. Methods and tools for dynamic capacity planning and control are discussed on this paper. Capacity planning is vital in operations management. Operations management is a vital part of an organization to achieve success because. Operations management an overview 7 quantity for production longrange capacity planning forecasting longterm future capacity demand economies and diseconomies of scale developing capacity. Capacity planning and management learning outcomes after reading this chapter you should be able to.
Wally whistance smith lecture notes, operations management, lecture week prof. This includes capacity forecasting, planning, monitoring and performance analysis. Global journal of management and business research volume xii issue xxiii version i 2 20 12 eary 64 2012 global journals inc. And they talked about the role that teamquest capacity management solutions play at helpsystems. Effective capacity is the optimum production level under predefined job and workschedules, normal machine breakdown, maintenance, etc. Many organizations become involved with capacity planning due to changes in demand, technology, the environment, etc. Assess the difficulties of matching capacity to demand. Determining the correct capacity level for your business at any given time to satisfy customer demand takes a great deal of assessment and careful consideration. Definition, principles, activities, trends since all companies have operations, i.
It is always m processing time with m being the number of resources e. This especially includes planning and production control ppc processes. It is conventional for a manufacturing company to equip itself to cope with a demand greater than that considered most likely to arise. Lectures notes on production and operation management. Home homework help operations management production planning capacity planning capacity planning the capacity of a facility of an industrial unit is planned keeping in mind the current. Capacity concerns for your operations management dummies.
The job of operations management om consists of all the activities involved in transforming a product idea into a finished product. How to develop a capacity planning strategy, including common techniques, tools, mib variables, and thresholds used in capacity planning. An operation may experience many changes and fluctuations in the. Pdf strategic operations management radhitya wirawan. Measurement of capacity planning in production and operations. If input information is not correct than output for material planning.
Capacity decisions need acute and careful attention by concerned persons as almost everything of the operations is related with capacity. They tackled the role of capacity management in operations management today including the cloud. Case studies advancing planning for operations best practices illustrating the benefits of planning for operations. Module 5 capacity planning free download as powerpoint presentation. Capacity planning in production and operation management. Capacity is the rate of productive capability of a facility. Capacity planning capacity can be defined as the maximum output rate that can be achieved by a facility. Capacity planning is the first step when an organization decides to produce more or new products. From a technology point of view, capacity management is the management of current it capacity to meet the present and future requirements of any business efficiently in terms of cost and time. Optimal pricing and capacity planning in operations. Capacity planning is described as matching the capabilities of an organization with the predicted level of future demand. Evaluate and apply the different strategies for matching capacity with demand in the short. Tactical planning is a middlelevel activity connecting strategic planning and operations control in which the basic problem to be solved is the allocation of resources i. Time and capacity are the two main constraints in capacity management.
Capacity planning unit introduction capacity planning is vital in operations management. Capacity and performance management best practices, including whatif analyses, baselining, trending, exception management, and qos management. Clipping is a handy way to collect important slides you want to go back to later. Capacity planning is done on the basis of projections for future product demand, labour and equipment requirements. Capacity planning is to be carried out keeping in mind future growth and expansion plans, market trends, sales forecasting, etc. This can give an operation a number of problems when attempting to plan capacity. Materials and resource requirement planning objectives. Nov 05, 2015 includes topics such as, defining and measuring capacity determinants of effective capacity evaluating capacity alternatives make or buy decisions costvolume analysis planning service. Optimised allocation of the production resources and quick. They include strategic or rough cut capacity planning, aggregate capacity planning, finite capacity planning also known as production scheduling and capacity. Thats the topic of a recent webinar with tom huntington and per bauer. Capacity management is the process of planning the resources required to meet business demands. How to initiate a capacity planning and management process for a rapid deployment unit of a security. Operations management is the management of processes that transform inputs into goods and services that add value for the customer.
Excel models for business and operations management. Material planning smoothens capacity utilization and allocates correct time to products as per demand forecast. The process of planning and managing the overall capacity of an organizations resources. Now customize the name of a clipboard to store your clips. Organisations willing to succeed in global competition have to integrate their internal and external processes. The concept of capacity was identified as policy guidelines in the work of glueck, kaufman, and wallect 1984.
Capacity planning can be difficult at times due to the complex influence of market forces and. Thanks for explaining the reasons why capacity planning is the secret to successful projects, its very helpful for me to make a better plan and i appreciate for sharing this wonderful piece of writing, it was very helpful, the points that helped me greatly were capacity planning, planning and time management. Another is the need to disclose proprietary information. Start studying operations management chapter 5strategic capacity planning. Capacity planning is not necessary to predict the future infrastructural needs of the higher institutions in kogi state. Wally whistance smith lecture notes, operations management. Finlay department of management studies, loughborough university of technology. Strategic capacity planning for products and services. Material and manufacturing planning system is one of the key essentials of a production plan. This can happen at three levels in an organization. The term operations management encompasses planning, implementing, and supervising the production of goods or services.
Strategic capacity planning process in construction business. Introduction to operations management boundless business. Strategic capacity planning for products and services read the chapter five summary. A technique used to identify and measure overall capacity of production is. The goal of operations management is to maximize efficiency while producing goods and services that effectively fulfill customer needs. Aggregate capacity management aims to balance capacity and demand in a cost.
Capacity measures the rate that the operation can transform inputs into outputs. 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. The strategic capacity planning undertaken by organization for 2 to 3 years of a time frame is referred to as medium term capacity planning. They are features of fastpro, a software which has toc as background, but in a way that it can be used. Demand forecasting capacity planning capacity requirement planning facility location facility layout. However, capacity strategic options chosen are primarily a function of demand. Building customer value through worldclass operations pwc capacity management itil capacity management guide for allhazard emergency operations planning supply chain strategy planning and operations operations management sustainability and supply chain management. Capacity planning and control is the task of setting the effective capacity of the operation so that it can respond to the demands placed upon it. Sep 10, 2017 capacity management is the process of planning the resources required to meet business demands. The purpose of the present paper is to analyze the capacity management needs and propose a new capacity planning framework for a construction company. Us capacity planning and its implications on the infrastructural development needs of some selected. In addition, operations managers are involved in planning and controlling the systems that produce goods and services. The capacity can be calculated for every station in a business process. If you have some experience with capacity management.