As we increase productivity we still need to consider how to deal with capacity as our demand increases. I am asking all Product Managers to do a capacity analysis in their areas of responsibility and develop both a short-term and long-term plan. As we begin to feel the crunch in the short-term, we can implement some of the ideas you propose in the short term plan, while at the same time, I will begin to have the Executive team consider the options for long term investment and capacity expansion. Your input on this matter is extremely important. I am looking for a thorough review and a plan with your recommendations and justification.
Analyze the capacities including the rates of production, the amount of physical space and needs for equipment and people. At what level of capacity are these processes operating? What are some of the possible bottlenecks?
What impact does the forecast have on future capacity needs? What are the implications if the forecast is inaccurate (too high or too low?)
What are some possible ways of increasing capacity and what are the implications for the short term and long term such as costs and investment in capital?
Determine a plan for the capacity situation in the Plasti-brack product line.
Justify your plan based on the concepts of capacity management.
The capacity analysis of the Excellent Manufacturing Company (EMC) includes several factors of capacity such as rates of production, the amount of physical space and needs for equipment and people. The rates of production are divided into four areas that are Blanking, Molding, Assembly and Packing. All these areas require different machine hours for production that are 3337, 4195, 33372, and 667 for Blanking, Molding, Assembly and Packing respectively. This analysis also determines needs for people for three different processes such as production, set up and non-production. All these processes contain four above areas that needed total people hours equal to 2,358.50, 2,010.75, 34,422.00 and 2,151.00 for each area respectively. The information of capacity analysis is quite significant to deal with capacity with the increase in demand for organizational products.
The amount of physical space is required for EMC plant layout that is divided into several parts. These parts include Heading, Blanking & Stamping, Zinc Die Cast, Molding & Trimming, Plastic Injection Molding, Plating, Brushing, Lacquer, Painting, Assembly, Packaging and Packing. At the same time, this analysis also considers the requirement of people for these areas. The required People per Machine (PPM) are different according to the processes. For production process 0.5, 0.25, 1 and 3 PPM, for setup process 1, 1, 1 and 3 PPM and for non-production process 1, 1, 1 and 3 PPM are required to complete the process for their each area. The total people hours are required 40,942.25 for all these processes in all the areas. In these areas, people are needed in different quantities for these processes such as the area of Molding needed 4 machines or equipments per people.
These processes are operating at different level of capacity such as the capacity level of blanking machine group is 75% and for plastic molding groups it is 93%. In addition, finishing processes has the capacity of 88% and all the others processes have around 80% that include assembly, packaging and packing processes.
Overall, the current capacity utilization at EMC is 92%. This ranges about 75% in the blanking machine groups to about 93% in the plastic molding groups. Assembly, packaging and packing are near 80%, while the finishing processes are around 88%. Thus, the oversell ...
Operations management and capacity forecasting is examined.