Course Objectives

• Define Capacity
• Explain What is meant by ‘Capacity Planning’
• Describe the Types of Capacity Planning
• Explain Operations Scheduling and Workplace Planning
• Describe the Types of Operations Scheduling
• Explain What is Aggregate Planning
• Explain the Strategies of Aggregate Planning
• Explain Production Planning and Control
• Explain the Inventory Models
• Describe the Principles of Material Handling
• Explain Planning and Scheduling Maintenance
• Explain Waiting Line (Queue) Management
• List the Characteristics of a Queue System
• Explain the Principles of World Class Manufacturing
• Describe World Class Manufacturing Techniques
Introduction

Henry Gotham is a
supervisor at one of Kirk &
Patrick Car manufacturing
plants.

Like any other supervisor in

the low level management,
he is responsible for
assigning of jobs and tasks to
various workers at the plant
to meet the daily, weekly as
well as monthly production
levels and schedules.
 Introduction

He also guides and instructs the workers for day to day activities and is
responsible for the quality as well as quantity of production.

Henry ensures that the resources are put to the optimum use and the
quality of the products is maintained.

He is also responsible for reporting on the daily status to the higher

management of the production schedules, produced quantity of goods etc.
Introduction

Recently, when the budget

was announced by the
government, they decreased
the price of gasoline and
diesel by a significant
amount.

Due to this, there was a

sudden surge in the demand
for cars because almost
everyone wanted to buy a
car as fuel prices were more
affordable now.
 Introduction

The management passed on instructions to its manufacturing plant that

they wanted at least an increase of 15% in the daily production level at the
plant.

The management hopes that this increased production levels would help
meet the current market demand and the company can make huge profits
from this situation if they succeed in meeting this surge in demand.
Introduction

Henry’s boss, Gerard Butler

calls him for a meeting to
discuss the situation.

He informs Henry that the

production levels have to be
increased.

However, Henry informs

Gerard that there are not
enough inventories of raw
materials to meet the
increase in production
quantity.
Introduction

Gerard passes on the

information to the higher
management who realize
that this is a grave situation
and that they just do not
have enough raw materials
to increase their daily
productivity limits.

Gerard suggests that could

contact the suppliers and try
to procure the raw materials.
 Introduction

However, when the suppliers are contacted, they inform Gerard that they
would not be able to supply the required raw materials before another
three months due to the huge demand from all sides.

Gerard discusses the situation with the higher management.

Introduction

Gerard as well as the

management knows that
they have failed to take
advantage of the increased
market demand and have
failed to make huge profits
out of the situation.

You have seen how Kirk &

Patrick Car Manufacturers
failed to meet the current
market demand as they were
not able to increase the
capacity of their
manufacturing plants.
Introduction

Hence, you can understand

that it is extremely crucial
that the capacity of the plant
should be planned properly
keeping in mind such
situations where the plant
may be required to over-
produce as well as under-
produce than its normal
productivity levels.
Introduction

Therefore, ‘Capacity
Planning’ can be the
competitive advantage that
can help an organization to
succeed and help fulfil the
objectives and strategies of
the organization.

Let us now learn about

‘Capacity Planning’
in detail.
 Definition - Capacity
‘Management Capacity’
is referred as the
amount of input
resources available to
produce relative output
over period of time.

‘Capacity’ is referred to
‘Capacity’ is the ability as maximum
of a given system to production capacity,
produce output within which can be attained
the specific time within a normal
period. working schedule.
 What is meant by ‘Capacity Planning’?

• ‘Capacity Planning’ is essential to be determine the

optimum utilization of resources and plays an important
role in decision-making process such as for, extension of
existing operations, modification to existing product lines,
starting new products, etc.
 What is Strategic Capacity Planning?

• ‘Strategic Capacity Planning’ is crucial as it helps the

organization in meeting the future requirements of the
organization.

• Planning ensures that operating costs are maintained at a

minimum possible level without affecting the quality.

• It ensures that the organization remain competitive and can

achieve its long-term growth plan.
Factors Affecting Capacity Planning
There are several factors that affect the efficiency and effectiveness of
capacity planning such as follows:

Production Technology Product Line or Matrix

External Structure (such as policies, safety regulations etc.)

Operational Structure (such as scheduling, quality assurance etc.)

Human Capital (such as job design, compensation etc.)

Production Facility (such as layout, design, and location etc.)

 Types of Capacity Planning
The three types of capacity planning based on
goal are:

Lead Capacity Planning

Lag Strategy Planning

Match Strategy Planning

Roll your mouse
over the icon, to
learn more.
 Objectives of Operations Scheduling
The following are the main objectives of operations scheduling:

Due importance to delivery

date and to avoid delays in
completion

Reducing time of job

on machines

Proper utilization of
work centers

Roll your mouse

over the icon, to
learn more.
Principles of Operations Scheduling
‘Operations Scheduling’ is arrived at based on the following
principles:

Ensure continuous job schedule

End to end completion of job

Ensure feedback so as to make adjustments

 What is Aggregate Planning?

• ‘Aggregate Planning’ is the process of working out

production requirements for a medium range by working
backwards from the final sales unit to raw materials
required.

• ‘Aggregate Planning’ is an operational activity critical to the

organization as aims at balancing the long-term strategic
planning with short term production success.
Overview of Production Planning and Control
 Factors affecting Production Control
‘Production Control’ cannot be the same across all of the organization.
‘Production Control’ is dependent upon the following factors:

Nature of Production
(job oriented, service oriented, etc.)

Nature of Operation

Size of Operation
Independent Demand Inventory Model

‘Independent Demand Inventory Model’

talks about raw material demand which is
dependent upon prevailing market
conditions and is not correlated to any raw
material currently used by the
organization.

Finished goods are an appropriate example

for independent demand inventory model.
Material Requirement Planning

One of the crucial components of a production

plan is material and manufacturing planning
system.

‘Material Requirement Planning’ plays a pivotal

role in assembly-line production.
 Waiting Line (Queue) Management

‘Queue Management’ deals

with cases where the
customer arrival is random;
therefore, service rendered
to them is also random.
A service organization can
reduce cost and thus
improve profitability by
efficient queue
management.
 Service Configuration
4

• Another aspect of waiting line

management is the service
configuration.

• There are four types of service

configuration, and they are as
follows:
o Single Channel, Single Phase
o Single Channel, Multi Phase
o Multi Channel, Single Phase
o Multi Channel, Multi Phase
Real Life Example

Let us now look at a

real life example to
understand the
characteristics of a
waiting line in different
situations.
Situation #1: Doctor’s Office
Situation #1: Doctor’s Office

The following are the characteristics of the waiting line

(queue) in a Doctor’s Office:

• Arrivals: The ‘Arrivals’ here are the individual patients

who come to visit the doctor for treatment.
• Arrival Process: The patient’s arrival is in single.
• Pattern of Arrivals: The patient’s arrival is scheduled
due to prior appointment with the doctor’s office.
• Behavior of the Arrivals: The Arrivals in the doctor’s
office join the queue, and wait until they are served.
• Channel: This is a single channel system where the
individual doctor is the server who will cater to the
needs of the arrivals (patients).
• Phase: This is a single step service process where a
single step is involved in getting service.
• Queue Discipline: The patients are served in the order
of their appointment time as well as their presence at
the time of appointment at the doctor’s office.
• Service Configuration: Single Channel, Single Phase
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