Capacity planning is an important component in the operations of all contemporary organizations. It enables them to cater for the needs of the customer by avoiding shortages. The measure of capacity required to meet the future demands of a certain company has to be calculated using the resources at the disposal of the institution.
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It is important to note that the estimates do not reflect the exact figures required. However, they help the management to avert any acute shortages that may occur in the future (Vonderembse & White, 2013).
Ratios are used in capacity planning. For example, operating ratios are used by many managers to estimate the capacity required after a specific duration of time.
In this paper, a case study of Beck Manufacturing is analyzed. In the paper, the author computes the capacity of individual equipment centers. In addition, the capacity of the system is determined. In addition, an analysis is provided with regards to where the focus of the company should lie if Beck wants to increase the capacity of the firm.
The additional capacity that can be achieved without bottlenecks is also highlighted. Finally, the author recommends strategies through which capacity can be increased without necessarily having to acquire additional equipment.
Determining the Capacity Machines and Systems
Beck Company has many machines working on different operations. Each of them has a specific role to carry out in the functioning of the entire organization (Koc & Ceylan, 2007). To determine output and relate it to demand in the market, it is important to calculate the capacity of these machines.
It is important to note that calculating the capacity of each machine has to take into consideration the four operations of the organization (Vonderembse & White, 2013).
Capacity of the Machine Centers
Number of hours = two- 8 hours shift= 64 hours
Run time per minute= 2
Number of machines =5
Reject rate= 3%
Capacity of each milling machine= (2*60 hour/day) * (64+0-0 hours/day) * (1-0.02) = 7526.4/5 number of machines =1505.28. The capacity for each milling machine is 1505.28/ hour
The capacity for grinding machines
Number of hours = 64 hours
Run time per minute = 3
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Number of machines= 7
Reject rate = 5%
Capacity of each grinding machine (3*60 hour/day) * (64+0-0 hours/days) * (1-0.05) = 10944/ 7 number of machines = 1563.43/ hour
Capacity of boring machines
Number of hours = 64
Run time per minute = 1
Number of machines = 3
Reject rate = 2 percent
Capacity of each boring machine = (1*60 hours/day) * (64+0-0 hours/day) * (1-0.02) = 3763.2/3 number of machines = 1254.4 /hour
Capacity of drilling machines
Number of hours = 64 hours
Run time per minute = 2.5
Number of machines = 6
Reject rate = 7 percent
Capacity of each drilling machine = (2.5*60 hours/day) * (64+0-0 hours/day) * (1-0.07) = 9896.91/ 6 number of machines = 1649.48 /hour
Capacity of the System
The system’s capacity is a function of the operations presented. Beck manufacturing plant has a total of four operations. The system capacity will be based on these functions.
System capacity = 1505.28+ 1563.43+ 1254.4+ 1649.48 = 5972.59/4 number of operations = 1493.1475
System capacity = 1493. 1475/ hour
Recommended Focus of the Company in order to Expand Capacity
Expanding the capacity of the manufacturing company can be achieved through various strategies. One of them entails increasing the number of machines. It is noted that the operations that are determined or constrained by machines cannot impact on the capacity of the plant if the number of people is increased.
New machines are more efficient than old equipment (Koc & Ceylan, 2007). Beck, the manager of the company, can double the capacity of the current production if he chooses to increase the number of machines. The two-fold increase in capacity can be achieved if the manager doubles the current number of machines.
For example, if he chooses to have five new milling machines, he will increase the number to 10. The current productivity will be doubled in the process. Consequently, the capacity of the company will rise.
Increasing Capacity While Avoiding Bottlenecks
Enhancing the capacity of operations is associated with a number of challenges. They include increased operational costs and the need to retrain employees (Somers & Nelson, 2003). As already indicated above, Beck can double the capacity of the company.
However, he should avoid causing a bottleneck in one operation in the process of increasing capacity. The manager can achieve this by ensuring that the increase in the number of machines is done uniformly in all operations.
Expanding the Capacity without Purchasing New Equipment
The proposed method of expanding the capacity of the company requires the company to purchase new equipment. The acquisition process increases costs of production for the company (Stevenson & Sum, 2010). However, it is possible to increase the capacity without necessarily having to buy new machines.
Beck can achieve this by repairing the old machines to increase their efficiency. The reject time in the old equipment may be brought about by wear and tear (Somers & Nelson, 2003). Repairing them will help in increasing efficiency. Consequently, the capacity of the manufacturing company will be expanded without the need to purchase new machines.
Koc, T., & Ceylan, C. (2007). Factors impacting innovative capacity in large-scale companies. Technovation, 27(3), 105-114.
Somers, T., & Nelson, K. (2003). The impact of strategy and integration mechanisms on enterprise system value: Empirical evidence from manufacturing firms. European Journal of Operational Research, 146(2), 315-338.
Stevenson, W., & Sum, C. (2010). Operations management: An Asian perspective. Singapore: McGraw-Hill/Irwin.
Vonderembse, M., & White, G. (2013). Operations management: Concepts, methods, and strategies. San Diego, CA: Bridgepoint Education, Inc.