Capacity Planning

Topics: Management, Supply and demand, Capacity planning Pages: 5 (1371 words) Published: December 29, 2012
In today’s competitive economic environment, customers do not just prefer but demand manufacturers to provide quality products in a timely fashion at competitive prices. To satisfy this requirement, manufacturers need to plan necessary and sufficient capacity to meet market demands. However, capacity planning is a very challenging task for many manufacturers. In Bangladesh now as well as the other industries ceramic industries need to compete to make better place in the market. Understanding and then building the infrastructure that provides the needed flexibility and speed requires an in-depth understanding of how capacity impacts your business. The impact of capacity management is felt throughout the organization, within every element of the supply chain. Supplier capacity can bring production to a standstill. Production capacity is equally important if the capacity is not great enough to meet peak demand periods and inventory building is not properly planned, customer demand will go unfilled. Distribution capacity, both storage and throughput, ensures delivery of the right product at the right time. Transportation connects all elements of the supply chain; as such its capacity issues are key influencing service levels and on-time delivery performance.

Manufacturers at the ceramic industries face the difficulty of planning resources for multiple products at the same time. Due to competition and the wide range of applications of a new technology, the Khadim ceramics Ltd. needs to produce a variety of generic or custom-made products to meet the requirements of its customers as well as the others. Such variety in products adds complexity to their supply chain. Different products might share common manufacturing processes or use common components. Because of the linkage between the products, you need to plan its capacity for producing multiple products together. However, finding the right level of capacity for all products at the same time is a large scale problem. A manufacturer, therefore, would benefit from efficient and practical algorithms for solving large scale capacity planning problems. Change has become the rule, not the exception. The need for capacity management is measured not in years or quarters but rather in weeks and months. Changes can be brutally fast without warning.

Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. Capacity planning can be simplified by creating representative models of the real world using a simplified capacity model based on critical or bottleneck resource availability and by interpreting the demand on that resource along to determine the overall likely output. This technique is called rough cut capacity planning and provides a rough check they demand and capacity is imbalanced. This process was originally envisaged to be the rule of an individual called master production scheduler who would present the output plan to production to produce. This concept was inherently flawed in that only that person owned the plan. if this check (which can usually be done one spreadsheets) is in place a process can then be build around this to involve the stakeholders in a planning process. The business environment has never been more challenging than it is right now. The speed of chains in the market place is creating a stress on corporations to respond quickly and effectively. The foundation that is required to react to dynamic changes in supply and demand is based on understanding your supply chain’s capacities. Understanding and then building the infrastructure that provides the needed flexibility and speed requires and in-depth understanding of how capacity impacts on your business. The impact of capacity management is felt throughout the organization, within every element of the...
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