Industrial Capacity Planning & Queue Management

Swapnil S. Shahade
PRN :- 15070142417

• Capacity
• Capacity Planning
• Strategic Capacity Planning
Contents
• Types of Capacity Planning
• Hierarchy Of Production Decisions
• Factors Affecting Capacity Planning
• Aggregate Planning
• Production Planning and Control
• Material Requirement Planning
• Waiting Line (Queue) Management
• Real Life Example On Queue Management

Introduction
‘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.

Capacity
‘Capacity’ is the ability
of a given system to
produce output within
the specific time
period.
‘Management Capacity’
is referred as the
amount of input
resources available to
produce relative output
over period of time.
‘Capacity’ is referred to
as maximum
production capacity,
which can be attained
within a normal
working schedule.

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.

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.
A technique used to
identify and measure
overall capacity of
production

Types Of Capacity Planning
The three types of capacity planning based on goal are:
Lag Strategy Planning
Lead Capacity Planning
Match Strategy Planning

Capacity planning based on the ultimate goal of to meet the current and future level
of the requirement at a minimal wastage
 Adding capacity in anticipation of an increase in demand
 Aggressive strategy with the goal of luring customers away from the
company's competitors by improving the service level and reducing lead time.
 Strategy aimed at reducing stock out costs.
 Adding capacity only after the organization is running at full capacity or
beyond due to increase in demand
 Adding capacity in small amounts in response to changing demand in the
market
 This is a more moderate strategy.

Long Term Capacity
Medium Term Capacity
Short Term Capacity
Capacity planning based on the timeline

Capacity planning based on the timeline
Long range capacity of an organization is dependent on
various other capacities like design capacity, production
capacity, sustainable capacity and effective capacity
The strategic capacity planning undertaken by organization
for 2 to 3 years
The strategic planning undertaken by organization for a daily
weekly or quarterly

Factors Affecting Capacity Planning
There are several factors that affect the efficiency and effectiveness of
capacity planning such as follows:
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.)

Hierarchy Of Production Decisions
Forecasts of future demand
Long Range Capacity Planning
Aggregate Planning
Master Production Schedule
Material Requirements Planning System
Detailed Job Shop Schedule

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

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
• 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

Let us now look at a
real life example to
understand the
characteristics of a
waiting line in different
situations.
Real Life Example

Situation #1: Doctor’s Office
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

Industrial Capacity Planning & Queue Management

Industrial Capacity Planning & Queue Management

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