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· Capacity is a measure of an organization's ability to provide customers with demanded services and goods in the amount requested and ina timely manner.
· Capacity decisions are critical to an organization's success because they commit significant resources to assets that usually cannot bechanged easily or economically.Capacity decisions should be based on the best estimate of the future and should be made so that as muchflexibility as possible is retained.
· Capacity should also be obtained in the proper amount. Too muchcapacity means that money has been invested in resources that are notreally needed. Too little means that potential sales and market share are lost.
· Estimating an organization'scapacity is not easy becausecapacity is affected by management decisions regarding changing the number ofhours worked, changing the product mix, adding staff, improving worker motivation, improving machine capabilities, enhancing quality, andincreasing product yield.
· Machine and departmental capacities are needed to determine thecapacity of the system. Thecapacity of a system can only be as much asits slowest department, which is the bottleneck.
· An increase in systemcapacity can be achieved by increasingcapacity in the bottleneck department. This is called rounding outcapacity.
· Capacity decisions include the following: when to addcapacity, how muchcapacity to add, where to addcapacity, what type ofcapacity toadd, and when to reducecapacity.
Case Study
BeckManufacturing
AlBeck, president ofBeckmanufacturing, wants to determine thecapacity of his facility, which produces steering gears for auto manufacturers.He has asked you to sort through the data and determine thecapacity of the system and how thatcapacity may be increased. The operation is aproduct layout that produces large numbers of nearly identical products. The process includes milling, grinding, boring, drilling, and assembling,in that order. Each finished product requires one operation on each type of machine. For example, each finished part is processed on one of thefive milling machines, one of the seven grinding machines, etc.
The facility runs two 8-hour shifts per day, with a third shift for maintenance. The industrial engineering department has provided you with thefollowing data on present operations. In addition, you have been told that assembly operations, while not unlimited, can be easily changed tomeet the need.
|
Operation |
Number ofMachines |
Run Time per Piece (min.) |
% Reject Rate |
|
Milling |
5 |
2 |
3 |
|
Grinding |
7 |
3 |
5 |
|
Boring |
3 |
1 |
2 |
|
Drilling |
6 |
2.5 |
7 |