OSCM ) CH5 Strategic Capacity Management

2020年11月4日 下午 11:52

LO5–1: Explain what capacity management is and why it is strategically important.

Economies of Scale Made of Steel

The Economics of Very Big Ships

Economy of Container Ships

• Allows a T-shirt made in China to be sent to the Netherlands for just 2.5 cents
• The Eleonora Maersk and the other seven ships in her class are among the largest ever built
• Almost 400 m long, or the length of four soccer fields, and another half-field across
• The ships can carry 7,500 or so 40-foot containers, each of which can hold 70,000 T-shirts

On this voyage, the Eleonora was carrying supplies for Europe’s New Year celebrations: 1,850
tons of fireworks, including 30 tons of gunpowder

Capacity Management in Operations and Supply Chain Management

Capacity: the ability to hold, receive, store, or accommodate

In business, viewed as the amount of output that a system is capable of achieving over a
specific period of time
Capacity management needs to consider both inputs and outputs
Many industries measure and report capacity in terms of output
Industries whose product mix is very uncertain, like hospitals, often express capacity in terms of
inputs

Capacity Planning Time Durations

• Long range : Greater than one year

• Intermediate range : Monthly or quarterly plans covering the next 6 to 18 months
• Short range : Less than one month

Strategic Capacity Planning

Determining the overall level of capacity-intensive resources that best supports the company’s
long-range competitive strategy

○ Facilities
○ Equipment
○ Labor force size

Capacity level selected has a critical impact on response rate, its cost structure, its inventory
policies, and management and staff support requirements
• Too low and the firm will lose customers and encourage competitors
• Too high and firm may have to cut costs or underutilize its capacity

Capacity Planning Concepts

Capacity utilization rate: 產能利用率

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Capacity utilization rate: 產能利用率
a measure of how close the firm is to its best possible operating level
=( )/( )

Economies of scale: 規模經濟

the idea that as a plant gets larger and volume increases, the average cost per unit tends to drop

Diseconomies of scale: 規模不經濟 （來自維修成本）

at some point, the plant becomes too large and average cost per unit begins to increase
(M&M, though the labor required to operate the equipment is low, the labor required to maintain
the equipment is high in response to the high demand!!)

Capacity focus 產能焦點

the idea that a production facility works best when it is concentrated on a limited set of
production objectives (e.g. specific product or product group)
Focused factory or plant within a plant (PWP) concept

Capacity flexibility 產能彈性 （能快速因應外環境）

the ability to rapidly increase or decrease product levels or the ability to shift rapidly from one
product or service to another
產能彈性是具有快速提升或降低製造數量的能力，或是從某一項生產或服務快速移轉產能
至另一項使用
Comes from the plant (facility/equipment), processes, and workers or from strategies that
use the capacity of other organizations

Flexible Plants
○ Ability to quickly adapt to change
○ Zero-changeover time
彈性工廠的目標是零轉換時間工廠，採用可移動設備、組合牆、容易連結及可改變路
徑的公用設備，能快速適應任何的異動。

Flexible Processes
○ Flexible manufacturing systems
○ Simple, easily set up equipment
彈性流程的縮影是彈性製造系統或簡單且容易設定的設備，這二個技術方法都允許快
速且低成本的轉換生產線，亦稱為範疇經濟。

Flexible Workers
○ Ability to switch from one kind of task to another quickly
○ Multiple skills (cross training)
彈性勞工，具多種技術和能力，可勝任不同的任務。

Flexible Manufacturing System FMS

彈性製造系統 : 主要的特色在於生產過程中若更換產品型態時，並不需要頻繁更換生產機械，
只要利用電腦化的工業控制系統修正即可達成，以因應市場製品的快速變化要求，並可達到
多樣化且量少的生產製品的客戶需求

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LO5–2: Exemplify how to plan capacity.

Considerations in Changing Capacity

Maintaining System Balance

• Best operating levels for each stage generally differ, balance is hard to achieve
• Manage bottleneck operations 找出瓶頸部門
維持系統平衡：
實務上不可能也不需要完美平衡，因為每個階段的作業水平經常是不同，除自動化生產線以
外，產品需求和流程的變化也可能導致系統的不平衡。

處理不平衡問題的方法 :
• 在瓶頸工作站增加產能：加班、租用設備、外包
• 在瓶頸部門設置緩衝存貨。
• 增加瓶頸部門的設備。

Frequency of Capacity Additions

• Cost of upgrading too frequently
• Cost of upgrading too infrequently
產能擴充的頻率
增加產能須考慮二種成本─擴充太頻繁的成本及太不頻繁的成本。
• 太頻繁：移動與重置舊有設備、員工訓練；設備更換之際必須停工，浪費產能。
• 太不頻繁：產能閒置

External Sources of Capacity

• Outsourcing
• Sharing capacity
作業與供應產能的外部資源
不擴充產能而使用現成的外部產能可能更經濟。常使用的策略是外包及分享產能。

Decreasing Capacity
• Temporary reductions
• Permanent reductions
產能縮減
臨時性縮減產能策略：如減少工時、無薪假等
永久性縮減產能：縮減設備的規模，甚至關閉整個設施。

Frequent versus Infrequent Capacity Expansions P.113

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Determining Capacity Requirements

1. Use forecasting to predict sales for individual products

2. Calculate labor and equipment requirements to meet forecasts
3. Project labor and equipment availability over the planning horizon

Example 5.1 P.114

Stewart Company produces two flavors of salad dressing

• Paul’s and Newman’s
Each is available in bottles and single-serving bags
Have three machines that can package 150,000 bottles each year
• Each machine requires two operators
Have five machines that can package 250,000 plastic bags per year
• Each machine requires three operators

What are the capacity and labor requirements for the next five years?

Step 1: Use Forecast to Predict Sales for Individual Products

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Step 2: Calculate Equipment and Labor Requirements

Step 3: Project Equipment and Labor Availabilities over the Planning Horizon

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LO5–3: Evaluate capacity alternatives using decision trees.

Using Decision Trees to Evaluate Capacity Alternatives

• A decision tree is a schematic model of the sequence of steps in a problem – including the
conditions and consequences of each step
• Decision trees help analysts understand the problem and assist in identifying the best
solution
• Decision tree components include the following:
○ Decision nodes – represented with squares
○ Chance nodes – represented with circles
○ Paths – links between nodes
• Work from the end of the tree backwards to the start of the tree
• Calculate expected values at each step

Example 5.2: Decision Trees P.117

The owner of Hackers Computer Store is evaluating three options – expand at current site, expand
to a new site, do nothing
The decision process includes the following assumptions and conditions
• Strong growth has a 55% probability
• New site cost is $210,000
Payoffs: strong growth = $195,000; weak growth = $115,000
• Expanding current site cost is $87,000 (in either year 1 or 2)
Payoffs: strong growth = $190,000; weak growth = $100,000
• Do nothing
Payoffs: strong growth = $170,000; weak growth = $105,000

Calculate the value of each alternative

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Diagram the Problem Chronologically

Calculate Value of Each Branch

Decision Tree Analysis with Net Present Value Calculations

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LO5–4: Compare capacity planning in services to capacity planning in
manufacturing.

Planning Service Capacity

Manufacturing Capacity

• Goods can be stored for later use

• Goods can be shipped to other locations
• Volatility of demand is relatively low

Service Capacity

• Capacity must be available when service is needed – cannot be stored

• Service must be available at customer demand point
• Much higher volatility is typical

Capacity Utilization and Service Quality

The relationship between service capacity utilization and service quality is critical
• Arrival rate: the average number of customers that come to a facility during a specific
period of time
• Service rate: the average number of customers that can be processed over the same period
of time
• Best operating point is near 70 percent (arrival time / service time )控制服務水準

Optimal levels of utilization are context specific

• Low rates are appropriate when the degree of uncertainty (in demand) is high and/or the
risks are high (e.g., emergency rooms, fire departments)
• Higher rates are possible for predictable services or those without extensive customer
contact (e.g., commuter trains, postal sorting)

Relationship Between the Rate of Service Utilization and Service Quality

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Summary
• An operations and supply chain management view of capacity emphasizes the time
dimension of capacity
Long range, intermediate range, and short range
• Best operating level is the rate that is sustainable by the system
• With economies of scale, as volume increases, average cost per unit drops
• Focused manufacturing plants are designed to produce multiple products using a concept
called plant within a plant
• From a strategic, long-term view, capacity additions or reductions come in chunks
• A useful technique for analyzing capacity problems is the decision tree
With this format, the sequences of decisions are organized like branches in a tree
• The potential consequences of the decisions are enumerated based on their probability of
occurrence and corresponding expected value
• Often, services require that capacity be available immediately and that it be near where the
customer resides
Firms that offer services often need to deal with dramatic changes in customer demand
over time

Practice Exam
1. The level of capacity for which a process was designed and at which it operates at minimum
cost
2. The concept that relates to gaining efficiency through the full utilization of dedicated
resources, such as people and equipment
3. A facility that limits its production to a single product or a set of very similar products
4. When multiple (usually similar) products can be produced in a facility less expensively than
a single product
5. The ability to serve more customers than expected
6. In a service process such as the checkout counter in a discount store, what is a good target
percent for capacity utilization

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