Capacity Planning – Meaning, Classification and its Goals
April 3, 2025
The production system design planning considers input requirements, conversion process and output. After considering the forecast and long-term planning organization should undertake capacity planning. Capacity is defined as the ability to achieve, store or produce. For an organization, capacity would be the ability of a given system to produce output within the specific time period.…
Introduction An organization can finalize its business plans on the recommendation of demand forecast. Once business plans are ready, an organization can do backward working from the final sales unit to raw materials required. Thus annual and quarterly plans are broken down into labor, raw material, working capital, etc. requirements over a medium-range period (6…
As children, we have always had to prove to our teachers or our parents that we have been working. The homework book was proof that we have spent our time productively and would often calm down angry parents and teachers. It seems like the same principles also apply in corporate life! Harvard Business Review has…
In last decade or so technology has changed the way organization conduct their business. Advent of technology in operation management has increased productivity of the organization.
The scope of Technology and operation management has evolved over a period of time and has moved from development of products into design, management and improvement of operating system and processes.
Usage of technology in operation management has ensured that organizations are able to reduce the cost, improve the delivery process, standardize and improve quality and focus on customization, thereby creating value for customers.
Technology drives efficiency in organization and increases’ productivity of the organization. However, bringing technology in the production system is highly complex process, and it needs to following steps:
Technology Acquisition: technology acquired should align with overall objectives of the organization and should be approved after elaborate cost-benefit analysis.
Technology Integration: technology affects all aspects of production i.e. capital, labour and customer. Therefore, a solid technology integration plan is required.
Technology Verification: once technology integrated, it is important to check whether technology is delivering operational effectiveness and is been used to its fullest.
Technology is getting extensively used in customization of design products and services. The usage of computers and supporting electronic systems is integral part of modern industrial and services industry. Current techniques can be broadly classified into following categories:
Computer-Aided Design (CAD): CAD facilitates linking of two more complex components of design at very high level of accuracy thus delivering higher productivity.
Computer-Aided Manufacturing System (CAM): Precision is very essential in operating any machines and therefore, Computerized Numerically Controlled machines are used, thus ensuring highest level of accuracy.
Standard for the Exchange of Product Data: As the name suggests product design is transmitted among CAM and CAM in three dimensions. Standard for The Exchange of Product Data process sharing of product across all phases of product life cycle and serves as neutral file exchange.
There are various software systems available to integrated operations and manufacturing functions with other business functions of organization. Some of the common software systems are Enterprise Resource Planning (ERP), Supply-Chain Management (SCM), New-Product Development (NPD) and Customer Relationship Management (CRM).
Enterprises Resources Planning (ERP) links all business functions like manufacturing, marketing, human resource and finance through a common software platform. The main benefits of the ERP solution are that it not only reduces database errors but also delivers value to customer through faster delivery and order fulfillment.
Automation reduces manual intervention in the manufacturing process. It increases productivity and reduces margin of error thereby facilitating economies of scale. There is this-advantages of automation also, such as unemployment, high breakdown cost and initial capital investment. Therefore, automation may not be suitable in all situations and in the end alignment with an overall organization objective is important.
Technology can be facilitating factor in bringing about change in operations and production management. But it may not be feasible to use technology in all aspects with challenge coming through high initial cost of investment, high cost of maintenance and mismanagement.
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