Capacity Management: Concepts For A Changing Environment

Discuss about the Capacity Management for Concepts for a Changing Environment.

 

Capacity planning refers to the activity of company considering their ability to produce the required output from the available resources or inputs.it entails he process of acquiring the required materials for production. There should be a proper forecast of the resources required to produce output so as to prevent the situation of stoppage of production or low quality output resulting from lack of lack of capacity in production (investinue, 2016).

1. Market demand for the product-call us supply plumbing company has to consider the demand for their product in the market, so that they are able to plan their capacity with the right amounts of desired output and thus effectively plan the effective capacity to produce this output to satisfy customer demand(larry E rittenberg).
2. The cost of the capacity –the cost of the capacity for call us plumbing supply company is important to be considered for efficient capacity. This is because the company has to come up with a capacity that is economical and will not result to high cost than revenues(larry E rittenberg).
3. The product design-for a product that has a standard uniform design, then the capacity is predictable and is easy to come up with, unlike for variable design products which will require that the capacity keep on being revised(larry E rittenberg). 

Adjustment strategy is that which the capacity is added gradually with increases in demand or with changes in production systems

Lead strategy-this refers to the company increasing their capacity with future expectations of increase in demand for their product.it ensures that the company is able to meet future demand increases in the company.

Lag strategy-this strategy only increases the capacity when the company production resources are being used to the fullest due to an increase in the demand for the product by customers.

(marone, 2013)

Call us plumbing supply requires strategies that will be able to ensure that they are able to manage capacity economically. They should also ensure that the capacity ensures that the demands for customers are met and that they are able to cater for fluctuating customer demands (masulis, 1988). The strategies are:

1. The adjustment strategy-this refers to the system that allows the capacity to be gradually increased with increases in demand. This strategy is favourable to call us plumbing supply because of ensuring that they are able to meet the customer demands, by being able to expand their capacity with increases in customer demand.
2. Lag Strategy-This is a strategy that increases capacity when the resources of the company are fully stretched in production. This strategy is important to call us supply because it ensures that the capacity is added when the demand is at peak and thus extra capacity is required. During off-peak times then it avoids the underutilisation of capacity.

• Lead strategy-this strategy ensures that the company increases their capacity with expectation of increases of demand in the future. This strategy is important to call us plumbing supply because it allows that the company be able to get ready for increases in demand for the plumbing products and are thus able to satisfy the increased demand(mayson, 2016-2017).  

1. To ensure continuous production-companies are required to keep the required amount of inventory to use in their production. This is to ensure that the production process is availed with the required inputs so that is does not suffer from shortage of input resulting to stoppage or poor quality of output.
2. To take advantage of discounts-companies keep inventory to be able to take advantage of consumer discounts. This is when the company when buying stock are given discounts for certain amounts and will thus buy large amounts of the product of inventory so as to take advantage of the discounts.

(mordecai lee, 2012)

Fixed order inventory management system is an inventory management system whereby the amounts of inventory are fixed. This means that the maximum level of stock is fixed at a certain amount which all reorders must not pass. The minimum stock level too is set at a fixed level at which inventory is reordered to avoid the inventory from going beyond this point. Variable period inventory management system differs in that the level of stock are set at changing levels of both minimum and maximum stock levels. There is no set amount of stock that is said to be a maximum while there is no minimum stock level too. (nigel slack, 2007) 

1. Just in time –this is a material management system that inventory is availed when needed and in the right amounts and quality.it manages by cooperation with the suppliers whereby they are able to bring the required material for production at the right time needed for production. For example, this system is used in Toyota company where they do not keep inventory for manufacturing vehicles at their warehouses but rather organise with the suppliers that the parts are timely supplied when needed.
2. Kanban system-this is a system of managing material where the system is set in manner that it is able to signal the need for input and it is supplied in time. The higher levels of production are able to signal the requirement for inputs to the lower levels and they are timely supplied with the necessary input. This is well applied by the Honda company whereby the manufacture of motor vehicle follows this system of material management. The Honda system is able to detect shortages in production and signals to the lower stages which timely provide the needed input(honda company, 2017).

(noe, 2014) 

1. ABC system-this is an inventory management system that categorises the inventory into classes A, B and C.the inventory is categorised in order of their value to the company that is A is for the most valuable products to the company, B is for moderately important products to the company and C is for the least important products to the company. This system is important to Mr Swartz in that it allows him to be able to take extra care of the inventory that is most valuable to the comoany.it enables save costs too because it helps him to be able to allocate lesser inventory management resources to the lesser important items of inventory.
2. Two bin inventory system –this refers to the storage of inventory in bins where one bin has the stock to be used while the second bin has the reserve stock. When the first bin is depleted, the second bin is used as they wait for the order to be fulfilled. This is an important system to Mr Swartz because it allows that there are no shortages of inventory because when an order is placed, then there is a reserve stock to take care of production.
3. Cross docking- this is an inventory management system where the suppliers supply the products in bulk to a central point where the bulk is broken and then transported to the shops requiring the products. This is important to Mr Swartz as it helps him not to keep inventory at warehouse thus saves on costs of storage.
4. Bulk system of inventory management-this is a system where the inventory is held in large amounts by the company. This system is important to Mr Swartz because of allowing to keep large amounts of needed inventory and thus does not suffer shortages of stock when demand for production is high and thus require that production be increased.

(robert l.mathis, 2015)

Supply chain management is the network of facilities whose role is to procure inputs, transform the inputs to final products and at last make sure that the finished products reach the customers in the right amount and quantity to satisfy demand.

Supply Chain for FMCG

The chained for the product is planned to ensure the smooth flow of the product from the input stage through to the final consumer. The planning requires that the supply chain be short to ensure that the product reach the market in time. The purchasing of the inventory emphasises that there be required amounts of inventory so as to ensure that the production is continuous without stoppage.it should also ensure that the inventory take advantage of discounts so as to reduce the expenses. The processing requires that it be smooth without stopping and each individual know their duties properly to ensure that the quality of the commodity is maintained and that the demand at the market is met. The distribution ensures that the product is taken to the customer convenient point of access and at the right amounts to ensure satisfaction (slaton, 2007).

1. To maintain a continuous production process- with inventory available, then the process of production does not suffer from lack of material or shortages and thus the production continuous smoothly.
2. For value addition- some inventory when kept in stores add their value and thus benefit the company for example wine.

(william stallings, 2012)

1. Start to end process approach-currently supply chain is not only concerned with the acquisition of raw materials.it has shifted focus to the whole process of production from the input stage, transformational and delivery to the final consumers.
2. Profitability growth-the supply chain systems have shifted their focus to ensure that the company earns profits through streamlining the process of production, thus reducing costs of production.
3. Integration of functions-the functions in supply chain are now dependent on each other compared to when they were independent of each other. This allows that processes flow smoothly because of the coordination form one stage to another.
4. The supply chain systems are more liquid-this means that the system are generating more income for the company compared to before when they were just a source of bringing materials to the company.
5. Customer focus-the systems of supply currently are focused on the satisfaction of the customer unlike before when they were concerned with just the ensuring of material flow in the company.
6. Introduction of information system- there are currently information systems that are used to do supply management functions such as making and analysing reports on inventory. Unlike before when it was human only doing the job physically.

(nigel slack, 2007)

1. Configure to order- this refers to the making of products having a lot of variations. The products end up being different from each other.
2. Make to stock-this is the making of many similar products that are not in line with the different needs of the customers.
3. Make to order-this is where the products are made according to the needs of the customers in the market.
4. Engineer to order –this is when the products are made according to the specific and unmatched need of a specific consumer.

(nigel slack, 2007)

Make to stock is the most favourable strategy because of the standardised nature of valves. The valves are usually standardised to cater for the different needs and thus the customer lack much of the choice to ask for a specific tailor made valve. This system therefore is favourable because of ensuring that the valves are standardised and also reduces the costs of acquiring the needed capacity. (nigel slack, 2007)

The company performs well in their supply chain activities that is capacity and their inventory. The company ensures that the quality is maintained through the supply chain as well as high performance in maintaining their capacity and inventory through the cooperation with their suppliers to ensure that they supply them in time and the right quality and quantity of the resources (nigel slack, 2007).

Call us plumbing supply can improve their performance management through the putting of checking systems to control how activities are conducted. This involves the putting of controls that are able to detect system errors and correct them early before they cause a reduction in the quality of products. This ensures that there is maintained performance of the system ensuring quality of the system (nigel slack, 2007). 

References

honda company. (2017, january 1). Retrieved april 3, 2017, from https://www.honda.com

investinue. (2016). Retrieved from investinue website: https://www.investinue.com

larry E rittenberg, b. j. (n.d.). auditing:concepts for a changing environmen. california: south western college.

marone, f. (2013). fault lines in global jihad:organisational,strategic and ideological.

masulis, r. (1988). the debt/equity choice. cambridge: ballinger .

mayson, f. (2016-2017). company law. kenya: oxford.

mordecai lee, g. n. (2012). the practice of government public relations. crc press.

nigel slack, s. c. (2007). operations management. In s. c. nigel slack, operations management (pp. 536-577). madrid ,spain: pearson.

noe, h. (2014). human resource management. mcgraw hill education.

robert l.mathis, j. h. (2015). human resource management. south western college pub. slaton, h. (2007). manufacturing employees. new york: vault.

william stallings, t. c. (2012). business data communication. pearson.