Capacity Management

Knowledge Center



Summary, forum, best practices, expert tips and information sources.

15 items • 30.443 visits


Summary

What is Capacity Management? Meaning.

Capacity Management (CM) is the function of establishing, measuring, monitoring, and adjusting limits or levels of capacity in order to execute all manufacturing schedules; i.e., the production plan, master production schedule, material requirements plan, and dispatch list.


Four levels of CM:

  • Resource Requirements Planning,

  • Rough-cut Capacity Planning,

  • Capacity Requirements Planning,

  • Input/Output control.

 

The Importance of Capacity Utilization

Capacity utilization can be critical for an organization to survive. Therefore, companies need to think about the degree of capacity utilization. Pennings and Natter (2001) mention two particular reasons why it is important to critically think about the degree of capacity utilization:

  1. Return On Investment. The degree of capacity utilization influences the return of investment of a company.
    For example, if there is a high degree of unused or excess capacity, the return on investment will be lower.
  2. Demand patterns. The effectiveness of setting a certain degree of capacity utilization depends highly on the demand patterns of all other  products of a certain company and differ per product. Therefore, one must take into account the demand patterns of all products produced in a certain company.
    For example, if a certain firm produces a product that is characterized by substantial seasonality of demand, there will be longer periods of overcapacity followed by periods of undercapacity. Switching part of production of the low-demand product to other products can be a good choice, provided the overall benefits are higher than the costs of switching.

Source: Pennings, E. And M. Natter (2001) “Strategic Diversification and Capacity Utilization” International Journal of Production Economics Vol. 73, Issue 3

Special Interest Group

Join

Capacity Management Special Interest Group.



Special Interest Group (156 members)

Forum

New Topic

Forum about Capacity Management.


Capacity Management Types
What are the (4) types of capacity management? (...)
6
 
1 comments
IT Capacity Management at Client Side
I work for a firm where we develop business software. The infrastructure management is outsourced.
My full activity (...)
3
 
How is Warehouse Capacity Impacting Productivity and Efficiency?
I understand peak efficiency of workers in a warehouse environment is achieved at 85% full capacity (usable warehouse st (...)
2
 
🔥 NEW Demand Forecasting
CONCEPT, SIGNIFICANCE, OBJECTIVES AND FACTORS
An organization faces several internal and external risks, such as hi (...)
1
 

Start a new forum topic about Capacity Management. More info.

 

Best Practices

The top-rated topics about Capacity Management. Here you will find the most valuable ideas and practical suggestions.


Expert Tips

Advanced insights about Capacity Management. Here you will find professional advices by experts.


Information Sources

Various sources of information regarding Capacity Management. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.


Capacity Management: Planning Resource Capacity

Capacity Planning, Capacity Management, Capacity Utilization
This presentation provides a clear explanation of capacity planning and its related concepts, definitions and capacity s (...)

Capacity Management and Planning

Capacity Management, Capacity Planning, Capacity Utilization
Detailed presentation that focuses on capacity management and planning. The presentation includes the following sections (...)

Capacity Planning for Goods and Services

Capacity Planning, Services, Goods, Demand Management, Capacity Management
Extensive presentation about capacity planning for both goods and services. The presentation includes the following sect (...)

Research Links

Automatically jump to further useful sources regarding Capacity Management.


News Videos Presentations Books More

News

Videos

Presentations

Books

More


Compare also: Capacity Planning  |  Capacity Utilization  |  Water Management

Special Interest Group

Do you have a keen interest in Capacity Management? Become our SIG Leader

 
 

Return to Management Hub: Supply Chain & Quality


More on Management  |  Return to Management Dictionary

 

This ends our Capacity Management summary and forum.



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2021 12manage - The Executive Fast Track. V15.8 - Last updated: 28-10-2021. All names ™ of their owners.