Process Design

Case study

Process design

Management questions addressed in process design

Q1) what level of capacity is needed from the process to serve market demand?

Answer:

Process management is a continuing activity. Processes used by companies are never static, instead they must change as customer demands evolve, competitive opportunities emerge, and new technologies improve. In this aspect capacity is often challenging to specify for particular activities and operations, and even more so far the entire process. In general, capacity captures the maximum rate of items processes per unit time. Capacity Level means ability to produce. The term is synonymous as Activity Level or Volume. Industries producing homogeneous units may express their capacity level in terms of units of output, whereas.

Maintaining the economic balance between your capacity and sales performance requires an explicit capacity strategy. The specifics of capacity strategies vary widely. One strategy would set capacity to deliberately lag demand; Harley-Davidson is a frequently cited example using the lag strategy where backlog and long quoted lead times are used to buffer capacity changes. Another is to have capacity lead demand: examples where this strategy could be used include competitive consumer markets, markets that demand short lead times with low inventories, or blocking a competitor's entrance into a prized market. The most prevalent strategy generally tries to match capacity and demand. An interesting variation on all three strategies is often used with product families having significant seasonal sales; they basically match capacity and demand over time while both leading and lagging sales with production at different points in time. Since most companies operate in different markets and have multiple products, it is important to set a strategy to serve each.

Q How should capacity be measured for each process operation or step? What is the capacity of each operation?

Ans: Capacity is...