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Capacity Management, Medium term capacity continuation, What should be the…

- - - - It is expressed in terms that are useful for capacity management (forecasts expressed only in money terms give little indication of the demand that will be placed on an operation)
      - It is as accurate as possible (in capacity management, the accuracy of a forecast is particularly important because, whereas demand can change instantaneously, there is usually a lag between deciding to change capacity and the change taking effects)
      - It gives an indication of relative uncertainty (Capacity decisions are based partly on the degree of confidence in a forecast)
- - - - Effective capacity being lost as people switch between tasks
      - Maintenance needing to be performed on machines
      - Training be required for employees
      - Scheduling clashes
    - - Labor shortages
      - Quality problems
      - Delays in the delivery of brought-in products and services
      - Machine, or software, breakdowns
    - - OEE = a × p × q
      - a = the availability of a process, p = the performance or speed of a process, and q = the quality of products or services that the process creates
      - This brings together the capacity leakage caused by:
        
        reduced availability (such as set-up and changes over losses, breakdown failures, when employees are being absent),
        
        reduced speed (such as when equipment is idling or being run below its optimum work rate, or when individuals are not working at their optimum rate),
        
        quality losses (caused by processing errors)
      - If all three of these dimensions are losses in the equation, OEE will represent the valuable operating times as a percentage of the capacity something was designed to have
- - - - Evaluate optimum mix of methods for capacity fluctuations
      - Work on hoe to reduce cost of putting plan into effect
  - - - Seek ways of providing steady capacity effectively
  - - - Combination of those for predictable and unpredictable variations
  - - - Identify sources of extra capacity and/or use for surplus capacity
      - Work on how to adjust capacity and/or use of capacity quickly
- - - - The methods of deciding this are:
        
        Capacity leading (timing the introduction of capacity in such a way that there is always sufficient capacity to meet forecasted demand)
        
        Capacity lagging (timing the introduction of capacity so that demand is always equal to or greater than capacity)
        
        Capacity smoothing with inventory (capacity is introduced to sometimes lead and sometimes lag demand, but inventory build-up during the lead time is used to help meet demand during the lag times)
- - - - A
        
        Quickiest and most convenient
      - D
        
        Extra payment normally necessary and agreement of staff to work (can reduce productivity over long periods)
    - - A
        
        without many of the costs associated with overtime, the number of staff time available to an organisation can be varied throughout the year to reflect demand
      - D
        
        when very large and unexpected fluctuations in demand are possible, all the negotiated annual working time flexibility can be used up before the end of year
    - - A
        
        Staffing levels can be adjusted to meet demand without changing job responsibilities or hiring in new staff
      - D
        
        Providing start and finish times that satisfy staffs' need for reasonable working times and shift patterns can be difficult
    - - A
        
        Reduce basic labor costs quickly
      - D
        
        Hiring costs and possible low productivity while new staff go through the learning curve
    - - A
        
        Good method of adjusting capacity to meet predictable short-term demand fluctuates
      - D
        
        Expensive if the fixed costs for each employee
    - - A
        
        Fast method of reacting to short-term demand fluctuations
      - D
        
        Investment in skills training needed and many causes some internal disruption
    - - A
        
        No disruption to the operation
      - D
        
        Can be very expensive because of sub-contractor's margin and sub-contractor may not be as motivated to give the same service
    - - A
        
        No need to provide extra resources
      - D
        
        Can only be used as a temporary measure, and even they can cause staff dissatisfaction, a reduction in the quality of work (or both)
- - - - They can be produced via the same processes
      - They have different demand patterns to existing offerings
      - They are sold through similar marketing channels
- - - - each month may not have the same amount of productive time (some months may contain vacations periods that reduce the availability of capacity)
      - a capacity level that seems adequate may only be able to supply products after the demand for them has occurred (e.g., if the period of under-capacity occurred at the beginning of the year, no inventory could have accumulated to meet demand)
  - - - The sources of customers: customers are not always human; they could be trucks arriving at a weighbridge, orders arriving to be processed or machines waiting to be serviced
      - The queue: Customers waiting to be serviced form the queue
      - Rejecting: if the number of customers in a queue is already at the maximum number allowed, then the customer could be rejected by the system
      - Balking: when customers are humans with free will, they may refuse to join the queue and wait for service if it is judged to be too long
      - Reneging: This is similar to balking, however, here customers have queued for a certain length of time and then leaves the queue
      - Queue discipline: This is the set of rules that determines the order in which customers waiting in the queue are served (first come-first serve)
      - Servers: A server is the facility that processes the customers in the queue
    - - Unoccupied time feels longer than occupied time
      - Pre-process waits feel longer than in-process waits
      - Anxiety makes the ait seem longer
      - Uncertain waits feel longer than known, finite waits
      - Unexplained waits feel longer than explained waits
      - Unfair waits feel longer than equitable waits
      - The more valuable the service, the longer customers will ‘happily’ wait
      - Solo waiting feels longer than group waits
      - Uncomfortable waits feel longer than comfortable waits
      - New or infrequent users feel they wait longer than frequent users