Capacity Planning.ppt
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Capacity planning is the process of determining the maximum output a facility can produce over a period of time. It involves allocating capital for new equipment and facilities, as well as planning workforce, inventory, and day-to-day equipment usage. Capacity can be measured by outputs like cars per shift or inputs like labor hours. Factors like demand forecasts, resource availability, and maintenance affect capacity. Capacity planning helps ensure facilities operate as effectively as possible.
Capacity Planning.ppt
- 2. Capacity Capacity is the maximum output rate of a facility Amount of output a system is capable of delivering over a specific period of time
- 3. Capacity Planning Capacity planning is the process of establishing the output rate that can be achieved at a facility: Capacity planning involves ◦ Allocation of capital for additional facility & equipment ◦ Planning workforce & inventory levels, & day-to-day use of equipment
- 4. How to measure Capacity There is no one best way to measure capacity Output measures & Inputs measures Type of Business Input Measures of Capacity Output Measures of Capacity Car manufacturer Labor hours Cars per shift Hospital Available beds Patients per month Pizza parlor Labor hours Pizzas per day Retail store Floor space in square feet Revenue per foot
- 5. Factors that affect Capacity Plan Demand forecast Availability of resource – HR, material, technology, etc., Nature of the product Maintenance
- 6. Types Design capacity: Maximum output that can be possibly attained Effective capacity: Maximum output considering all factors Production capacity: Maximum rate of Production Maximum capacity: Maximum output that a facility can achieve under ideal conditions
- 7. Calculating Equipment Effectiveness Measures how much of the available capacity is actually being used: ◦ Measures effectiveness ◦ Use either effective or design capacity in denominator Actual Output Effectiveness = (100%) Capacity
- 8. Example : In the bakery example the design capacity is 30 custom cakes per day. Currently the bakery is producing 28 cakes per day. What is the bakery’s capacity utilization? Utilization = (28/30) * 100% =93%
- 9. Types of Capacity Plans Long Range Capacity Planning Location Decisions Technology decisions Developing new production line / product Investment Decisions Short Range Capacity Planning Inventory planning and fluctuations Scheduled maintenance Hiring HR Working capital requirement
- 10. Capacity Planning Process Step 1: Identify Capacity Requirements Step 2: Develop Capacity Alternatives Step 3: Evaluate Capacity Alternatives Step 4 : Select the appropriate Capacity Alternate
- 13. Detailed Layout The decision of the location of each facility inside the shops The decision of the routing path of the material flow inside the shops The design of the main stock inside the shops Traffic road between operation modules