Capacity Planning – Meaning, Classification and its Goals
April 3, 2025
The production system design planning considers input requirements, conversion process and output. After considering the forecast and long-term planning organization should undertake capacity planning. Capacity is defined as the ability to achieve, store or produce. For an organization, capacity would be the ability of a given system to produce output within the specific time period.…
Introduction An organization can finalize its business plans on the recommendation of demand forecast. Once business plans are ready, an organization can do backward working from the final sales unit to raw materials required. Thus annual and quarterly plans are broken down into labor, raw material, working capital, etc. requirements over a medium-range period (6…
As children, we have always had to prove to our teachers or our parents that we have been working. The homework book was proof that we have spent our time productively and would often calm down angry parents and teachers. It seems like the same principles also apply in corporate life! Harvard Business Review has…
Organization success is dependent on customer satisfaction and delight. Customer satisfaction is achieved through development of product and service, which have all attributes required by the customer. A success product or services do not only have attractive package design but should be also able to provide robust performance.
Thus, product design must be practical enough for production and powerful enough to provide a competitive advantage.
A good product design has following common features:
The essence of product design is to satisfy customer and maximizes the value for the customer at minimum cost. The product or service should also be able to meet primary needs and desire of the customer. This may not require development of new product, but enhancement to existing product or service.
Product design is a creative process which looks at all the available options and beyond. The process is can be divided into three stages:
A successful product design is combination factors as follows:
Correct Team Selection: This is very essential to get the correct team in place which has expert designers who are not only aware and comfortable with technology but also understanding of customer expectation.
Customer Involvement: Involvement of customer in product design and testing can provide insight into the direction of the project
Prototyping and testing: Product design is high risk concept as it involves commitment of capital and man-power; therefore, it is imperative that extensive prototyping and testing are done with customer and market.
Raw Material: It is essential that raw material to be used in the production meets the quality standards of the end product. Furthermore, procurement system needs to be in place to ensure continuous, cost effective supply.
Production method and process layout: Feasibility of production method and process layout determines future success of the product.
External Factors: Environmental and government regulations plays an important part in product design. And these norms are updated from time to time, so product design should have the flexibility to adapt.
Production selection process is done through a combination of financial analysis, risk analysis, existing product portfolio, raw material supply and pre-determined product criteria.
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