Capacity Planning - Overview and Key Concepts
Summary
TLDRThis video script delves into capacity management, defining it as the maximum output rate of a processor or system. It explores real-life applications, such as concert halls and restaurants, and distinguishes between design capacity, effective capacity, and actual production. The script discusses the importance of capacity utilization and efficiency, which are crucial for operations directors. It outlines strategies for capacity planning, including expansionist and conservative approaches, and categorizes capacity planning into short-term, medium-term, and long-term, each with its own set of drivers and considerations.
Takeaways
- 📏 Capacity management is crucial for determining the maximum output rate of a processor or system.
- 🏢 System capacity is a concept applicable to everyday life, such as planning for the number of people a concert hall or restaurant can accommodate.
- 🛠️ Design capacity refers to the theoretical maximum output under ideal conditions within a given period.
- 🔧 Project engineers design machines with a specific output rate in mind, such as producing 200 parts per minute.
- 🔄 Effective capacity is the output expected by a company under current operational constraints, which can differ from the design due to factors like product mix.
- 🔄 Capacity available can be influenced by changes in work content, product mix, or the speed of operations.
- 📈 Measuring utilization and efficiency helps in understanding how well a system is performing against its design capacity.
- 📈 Efficiency is calculated as real production divided by effective capacity, and it's a key metric for operations directors.
- 📈 Capacity strategy involves deciding whether to add capacity ahead of demand (expansionist) or to wait and see (conservative).
- 📈 Different time horizons for capacity planning include short-term (0-3 months), medium-term (3-12 months), and long-term (1-5 years), each with different drivers and strategies.
- 🔩 In short-term capacity planning, options like overtime work can be considered to meet immediate demands.
Q & A
What is the definition of capacity management?
-Capacity management refers to the maximum rate of output of a processor or system, which is the theoretical maximum output in a given period under ideal conditions.
How does capacity management apply to everyday life?
-In daily life, capacity management is seen in determining how many people a concert hall or a restaurant should accommodate, or how many batteries a plant should be able to produce.
What is the role of a Project Engineer in capacity management?
-A Project Engineer is responsible for designing machines to run at a certain output rate, such as 200 parts per minute, which is the design capacity.
What is the difference between design capacity and effective capacity?
-Design capacity is the theoretical maximum output under ideal conditions, while effective capacity is the output expected by the company under current operations constraints.
How can changes in work content, product mix, or equipment affect capacity available?
-Changes in work content, product mix, or equipment can affect capacity available by altering the speed or pace at which work is done, thus impacting the efficiency and output of the system.
What is the formula for measuring utilization in capacity management?
-Utilization is measured by the formula: real production / design capacity.
What is the formula for calculating efficiency in capacity management?
-Efficiency is calculated by the formula: real production / effective capacity.
Why is efficiency important for an operations director?
-Efficiency is crucial as it is the main driver for the operations director, helping to determine the effectiveness of the operations and the need for capacity adjustments.
What are the two main capacity strategies mentioned in the script?
-The two main capacity strategies are 'add capacity to go ahead of demand', which is an expansionist strategy, and 'wait and see', which is a conservative strategy.
What are the main drivers for short-term capacity management?
-The main drivers for short-term capacity management are planning jobs, planning people, and scheduling machines.
What are the main drivers for medium-term and long-term capacity planning?
-For medium-term capacity planning, the main drivers are subcontract operations, adding manpower, increasing or using stocks, adding shifts, and adding equipment. For long-term capacity planning, the main driver is adding installations at equipment with long installation lead times.
How can overtime work be a part of short-term capacity planning?
-Overtime work can be a part of short-term capacity planning as it allows for an increase in production output within a short period, typically up to 3 months.
Outlines
🔍 Understanding Capacity Management
This paragraph introduces the concept of capacity management, which is defined as the maximum rate of output a processor or system can achieve. It uses everyday examples such as concert halls and restaurants to illustrate the practical implications of capacity planning. The paragraph distinguishes between design capacity, which is the theoretical maximum output under ideal conditions, and effective capacity, which is the output expected under current operational constraints. It also discusses how changes in product mix, equipment, and work pace can affect available capacity. The importance of measuring utilization and efficiency is highlighted, which are calculated as the ratios of real production to design capacity and effective capacity, respectively. The paragraph concludes with a discussion on capacity strategy, mentioning expansionist and conservative approaches, and the need for management to choose a strategy based on demand and risk assessment.
Mindmap
Keywords
💡Capacity Management
💡System Capacity
💡Design Capacity
💡Effective Capacity
💡Capacity Cushion
💡Utilization
💡Efficiency
💡Capacity Strategy
💡Short-term Capacity Planning
💡Medium-term Capacity Planning
💡Long-term Capacity Planning
Highlights
Capacity management is about the maximum rate of output of a processor or system.
System capacity is essential in daily life, such as determining the size of a concert hall or a restaurant.
Design capacity refers to the theoretical maximum output under ideal conditions.
Project Engineers are tasked with designing machines to run at a specific output rate.
Effective capacity is the output expected by the company under current operational constraints.
Capacity cushions are affected by changes in work content, product mix, and equipment.
Utilization is measured by dividing real production by design capacity.
Efficiency is calculated by dividing real production by effective capacity and is a key performance indicator.
Capacity strategy involves deciding whether to add capacity to meet demand or to wait and see.
There are different capacity strategies: expansionist, conservative, or a balanced approach.
Short-term capacity planning focuses on planning jobs, people, and machines within 0 to 3 months.
Medium-term capacity planning considers subcontracting, manpower, stocks, shifts, and equipment within 3 to 12 months.
Long-term capacity planning looks at adding installations and equipment with long lead times over one to five years.
In short-term capacity planning, management can also consider adding overtime work.
Capacity management is crucial for operations directors to align with company strategies and market demands.
Transcripts
[Music]
capacity management capacity is the
maximum rate of output of a processor
system capacity is in our daily life how
many people should a concert hall have
how many people should a restaurant be
able to serve how many batteries should
a plant be able to produce design
capacity theoretical maximum output in a
given period under ideal conditions
Project Engineer design machine to run
at 200 parts per minute effective
capacity output expected by the company
under current operations constraints for
example different product mix as was
initially designed some capacity
cushions capacity available is affected
by work content change product mix
change equipment change speed or pace at
which the work is done measure
utilization equals real production /
design capacity efficiency equals real
production / effective capacity
efficiency is the main driver for the
operations director number of capacity
and strategy one add capacity to go
ahead demand this is an expansionist
strategy this can result in economics of
scale to wait and see this is a
conservative strategy it follows demand
and expands in smaller increments some
risk is what we perhaps can be unable to
respond to high demand management should
choose between these two strategies or
another in between according to the
horizon we can talk about short-term
capacity 0 to 3 months our main drivers
for capacity management are planning
jobs planning people schedule machines
medium-term capacity 3 to 12 months our
main drivers are subcontract operations
add manpower increase or use stocks add
shifts add equipment
long-term capacity planning one to five
years our main drivers have added
installations at equipment with long
installation lead time of course in
short term capacity planning you can
also add overtime work
[Music]
تصفح المزيد من مقاطع الفيديو ذات الصلة
Capacity Management (No Background Music)
Design Capacity and Effective Capacity - Calculating Capacity Utilization and Efficiency Rate
Topik 2 SPAM: Kelaikan mulai dari distribusi #airminum #perpipaan
Capacity and Capacity Utilisation
Introduction to Aggregate Planning (Meaning, Concept, Objectives, Steps, Benefits, Inputs & Outputs)
What is Bottleneck Analysis in Lean manufacturing ? | Bottleneck Analysis in explained with ✅𝐄𝐗𝐀𝐌𝐏𝐋𝐄
5.0 / 5 (0 votes)