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…
The objective of organization is to provide service and product, which satisfy customer and create value for them. A product and service designed is based on the customer feedback and requirement of the market.
Process design is where the product is broken down into parts, which further can be helpful in the actual manufacturing process.
A product, for example, has attractive packaging to provide the right aesthetics plus has function and features, which provide value to customers. Process design ensures that there is smooth and continuous relationship between required output and all the intermediate process.
For example, manufacturing of Air-Conditioners, process design has to be such that maximum supply is achieved during the hot months of summer when demand of the product is at the highest. So people, process and machines need to align to give continuous production throughout the year as to satisfy seasonal demand.
Process development for process design can be summarized through following steps:
Based on the nature of product and service production or conversion process can be divided into two broad categories, continuous production (assembly line, oil refinery) and intermittent production (job work, service).
Production process for both manufacturing industry and service industry can be classified into broad categories based on standardization of product or service. It can range from single project assignment like a building or bridge (manufacturing) to interior design (service) and mass production project like a car (manufacturing) to a fast-food joint (Services).
A successful process design has to take into account the appropriateness of the process to overall organization objective. Process design requires a broad view of the whole organization and should not have a myopic outlook. And the process should deliver customer value with constant involvement of the management at various stages.
In order to achieve a good process design, effective process strategy is required, which deals with a singular line items required to manufacture the end product. Effective process strategy deals with raw material procurement, customer participation, technology investment, etc.
Over a period of time process design has undergone change and new concepts like Flexible Manufacturing Systems have been developed, which delivers efficient and effective production design and analysis.
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