Capacity planning involves determining the kind of human labour
& machinery required and when is it required. There are some important
considerations to make a good capacity decision.
- Demand forecasts or level of demand
- Cost of operation or production
- Funds & its availability
- Management Policy
Here is the further
explanation -
- The capacity of the plan is limited by demand levels. Stable
demand makes the capacity planning simple.
- Fluctuations in demand can create an issue concerning the
amount of resource to be required. Hence estimation of the level of
demand is an important consideration.
- It helps to synergise between internal management &
external environment.
- The design capacity helps to understand the maximum possible
output that can be produced in a given time period and with the
resources available.
- Knowing the future capacity needs also serve as an
important consideration. The gap between existing and estimated
capacity helps to plan the manufacturing in a much better
manner.
Other Considerations
- The facilities are an important consideration. It includes the
size and whether the provision of expansion is present. Design,
locational factors and layout all play an important role.
- The design of the product also has an important influence on
capacity utilization. For example - if the output is more uniform
then standard material and methods can be used.
- The process and its quantitative capacity is another important
consideration.
- Human consideration like job design, nature, training and
learning, motivation, leadership style and effectiveness, turnover
rates etc all play an important role as well.
- Operational considerations involve material management,
scheduling, quality standardisation, policies, maintenance and
reports to ensure effective capacity.
- External considerations in the form or minimum product
standards, pollution standards, safety and trade union
management.
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