PLANNING OF PRODUCTION CAPACITY

Capacity: it is the amount of product obtained from a process per unit of time. It is the
highest level of production that a company can reasonably sustain, with schedules
realistic for its staff and with the team it has. It is defined as the ability to have,
receive, store or accommodate. In business, in a general sense, it is often considered as
the amount of production that a system is capable of generating during a specific period.
When operations managers think about capacity, they must consider the inputs of
resources and the manufactured products. This is because, for planning purposes, the capacity
Reality depends on what is thought to be produced. An example; a company that manufactures multiple
products will inevitably produce more of one kind than another in a quantity
determined by resources. Therefore, even when the managers of a car factory
they declare that their facilities have 6,000 man-hours available per year, they are also
thinking that they can be used to manufacture 150,000 two-door models or 120,000 models
of four doors. This reflects that they know what their inputs of technology and workforce
They can produce and know the mix of products that they will demand from these resources.
Capacity planning has different meanings for the people who are
at different levels of the administrative hierarchy of operations.
Capacity in a relative term and, in the context of operations management, is
it could be defined as the amount of resources available that will be required for production,
within a specific period.
TIME HORIZONS FOR CAPACITY PLANNING
In general, capacity planning is considered to refer to three periods.
Long term; more than a year. When a lot of time is needed to acquire or
getting rid of resources for production then the long-term capacity planning
The term requires the participation and authorization of senior management.
Medium term; monthly or quarterly plans that fit within the next 6 to 18 months.
months. In this case, alternatives such as hiring, layoffs, the new
tools, the acquisition of minor equipment, and outsourcing can alter the
capacity.
Short term; less than a month. It is linked to the process of daily or weekly programs.
and implies making adjustments so that there is no variation between the planned and actual production.
Include alternatives such as overtime, staff transfers, and other routes for the
production.
The objective of strategic capability planning is to provide an approach for determining
the general level of the capacity of capital-intensive resources that better supports the strategy
the company's long-term competitive level. The level of capacity chosen has repercussions
criticisms in the company's response index, the structure of its costs, its policies of
inventory and the administrators and support staff it requires.
If the capacity is not adequate, the company could lose customers due to slow service.
or that allows competitors to enter the market.
If the capacity is excessive, the company may be forced to lower prices to
to stimulate demand, to underutilize its workforce, to carry excessive inventory or to seek
additional products, less profitable, to stay in business.
Best operating level refers to the capacity level for which the process has been designed and,
for the same reason, it refers to the production volume at which the average cost is minimized
unit.
A very important measure is the capacity utilization index, which reveals how much
Search finds the company at the best operating point.
Capacity utilization index = used capacity / best operating level
An example would be; if the best operating level of the plant were 500 cars per day and if
if it were currently operating 480 cars per day, then the utilization rate of the
capacity would be 96%.
Useful index. From capacity = 480 / 500 = 0.96 or 96%
Importance of capacity decisions:
Impact on the ability to meet future demands
It affects operating costs.
High initial costs
Involves managerial commitment from L.P.
It affects competitiveness
Affects the ease of managing and administering
Globalization adds complexity.
It impacts long-term plans
Capacity flexibility
Capacity flexibility means having the ability to increase or decrease the
production levels quickly, or to move production capacity expeditiously from
a product or service to another. This flexibility is possible when you have plants, processes and
flexible workers, as well as strategies that leverage the capabilities of other organizations.
Flexible plants: it is one that takes no time at all to switch from one product to another.
This plant uses movable equipment, removable walls, and electricity supply.
very accessible and easy to change route and, consequently, can be quickly adapted to
change.
Flexible processes: the epitome of flexible processes are, on one hand, flexible systems.
of production and, on the other hand, the simple and easy-to-prepare equipment. These two approaches
technological advances allow for a quick transition, at low cost, from one product line to another and this
leads to what is known as economies of scope. (By definition, economies of
economies of scale exist when multiple products can be produced at a lower cost in
combination that separately.
Flexible workers: they possess multiple skills and are able to move easily.
from one type of task to another. They require more extensive training than that of the workers.
specialized and need the support of managers and administrative staff so that they
quickly change your work assignments.
CONSIDERATIONS FOR INCREASING CAPACITY
When planning to add capacity, it is essential to consider many issues. Three very
important are:
Maintain the balance of the system.
Frequency of capacity increases.
External sources of capacity.
HOW TO DETERMINE THE CAPACITY THAT WILL BE REQUIRED
The demands for individual product lines and plant capabilities must be addressed.
individuals and production allocation across the plant network. Generally,
this is done with the following steps:
1. Use forecasting techniques to predict the sales of individual products within
each product line.
2. Calculate the equipment and labor that will be required to meet the forecasts.
the product lines.
3. Project the equipment and labor that will be available during the horizon of
plan.
Many times, the company decides to have a cushion of capacity that will be maintained between the
projected requirements and actual capacity. A capacity cushion refers to the amount
of capacity that exceeds the expected demand.
An example would be, if the expected annual demand of a facility is 10 million dollars.
in products per year and if the design capacity is 12 million dollars per year, it will have
a capacity cushion of 20% is equal to an index of
utilization of 83% (100% / 20%).
3.1 MEASURES OF CAPACITY
When the produced units are relatively homogeneous, the capacity units are
quite obvious. For example, a car manufacturing plant uses the number of cars per
year, Kraft Inc. may refer to the production in tons of cheese per month. In this case, the
capacity is measured in units of production; but what happens with organizations with lines of
more diversified products, for example: how can the capacity of an office be measured?
of lawyers or a veterinary clinic? In part, the answers depend on the problem of
the combination of products, it is difficult to find a common production unit that has
sense. In the case of replacement, the capacity can be measured in terms of measures of
supplies. A law firm can express its capacity in terms of the number of
employed lawyers.
When the produced units are more diverse, it is common to use a measure of
availability of the limiting resource as a measure of capacity. Therefore, an estimation of the
capacity can be measured in terms of the inputs or the outputs of the process
conversion. Some common examples of capacity measurements used by different
Types of companies are shown in the following table.
In summary, measuring capacity will require addressing the following issues:
An aggregated measure.
Effects of product mixing.
Operating policies (for example, hours per week).
Constant capacity and peak capacity.
3.2 THEORY OF CONSTRAINTS
The Theory of Constraints (TOC) is a comprehensive management philosophy that uses methods
used by pure sciences to understand and manage systems based on human beings
(people, organizations, etc.).
The T.O.C. allows focusing solutions on the critical problems of companies (regardless of their
size or turn), so that they can approach their goal through a continuous improvement process.
The Socratic method was used as the basis for its development.
The TOC encompasses a set of knowledge, principles, tools, and applications that
they simplify the management of systems, using pure logic or common sense.
The Theory of Constraints is the application of the scientific method to organizations.
human nature seeks to continuously generate more than the goal of a system.
Continuous improvement in the theory of constraints
The Theory of Constraints was first described by Eli Goldratt in the early 80s and
Since then it has been widely used in the industry. It is a set of processes of
thinking that uses the logic of cause and effect to understand what happens and thus find
ways to improve. It is based on the simple fact that multitasking processes, of any
scope, they only move at the speed of the slowest step. The way to accelerate the process is
using a catalyst is the slowest step and getting it to work to its full capacity
to accelerate the entire process. The theory emphasizes clarity, findings, and support of
limiting principal factor. In the description of this theory, these limiting factors are referred to
restrictions or "bottlenecks".
Systematic Approach of the TOC
a) IDENTIFY THE SYSTEM RESTRICTIONS: a restriction is a variable that
conditions an course of action. There may be different types of restrictions, being the most
common, those of a physical type: machinery, raw materials, labor, etc.
b) EXPLOIT THE SYSTEM RESTRICTIONS: it involves finding a way to obtain the
maximum possible production of the restriction.
c) SUBORDINATING EVERYTHING TO THE PREVIOUS RESTRICTION: the entire scheme must function in accordance with it.
rhythm that marks the restriction (drum).
d) ELEVATE SYSTEM RESTRICTIONS: This implies addressing a program of
improvement of the activity level of the restriction.
e) IF A RESTRICTION IS REMOVED IN THE PREVIOUS STAGES, RETURN TO STEP a):
to work permanently with the new restrictions that arise.
3.4 TOOLS FOR CAPACITY PLANNING
Planning as part of the administrative process constitutes a complex element that is
related to anticipating the future, sometimes uncertain, and which begins with the aim of optimizing
our performance in a task or facilitating the resolution of a problem actively or
foreseeable.
The objective of capacity planning is to ensure that the content can reach everyone.
users without delays or interruptions. A network for streaming multimedia sequences
adequately configured and planned will improve response times, data performance,
availability of content and will reduce the data error rate.
Capacity planning is based on three variables: audience volume, type, and size.
of the content, and the number and speed of the servers. In most cases, the planning
Capacity is used to determine the server requirements necessary to provide a
amount of content to a selected audience, although a planning can be decided
to determine other variables under certain circumstances.
3.4.1 Queueing Models
One of the most important fields of operations management is to understand what they are
the lines or queues and learn to manage them. In the service economy, people
Wait in different lines every day, since he heads to work in the car, spends
when leaving the supermarket. There are also lines of waiting at factories; the jobs
They wait in line to be processed in different machines and they wait their turn to be
revised.
Queueing models consist of formulas and mathematical relationships that can
used to determine the operational characteristics (performance measures) for a queue.
Arrival of the customers
Arrivals to a service system can come from a finite or infinite population.
The difference is important because the analysis is based on different premises and requires
different equations for its solution.
Finite population; it refers to the limited set of clients who will use the service and, at times,
they will form a line. The operational characteristics of interest include the following:
Probability that there are no units or customers in the system.
Average number of units in the queue.
Average number of units in the system (the number of units in the queue
more the number of units that are being attended to).
Average time a unit spends in the waiting line.
Average time a unit spends in the system (waiting time plus time of
service).
Probability that a unit arriving has to wait for the service.
Queueing models consist of formulas and mathematical relationships that can
used to determine the operational characteristics (performance measures) for a queue.
The operational features of interest include the following:
Probability that there are no units or customers in the system.
Average number of units in the queue.
 Average number of units in the system (the number of units in the queue
plus the number of units being serviced.
Average time a unit spends in the waiting line.
Average time a unit spends in the system (waiting time plus processing time)
service).
Probability that a unit arriving has to wait for service.
Managers who have this information are better able to make decisions that balance
the desired service levels with the cost of providing such service.
Uncolaes a line of wait y the theory of colas is one collection
of mathematical models that describe particular queueing systems or systems of
colas. The models help to find a good compromise between system costs and the
average waiting line times for a given system.
Queueing systems are models of service systems. As a model,
they can represent any system where jobs or clients arrive seeking a service
of some kind and come out after the service has been attended to. We can model the
systems of this type, both simple queues and interconnected queue systems
forming a queue network. In the following figure, we can see an example of a queue model.
simple. This model can be used to represent a typical situation in which customers
they arrive, wait if the servers are busy, are served by an available server and are
march when the required service is obtained.
The objectives of queue theory consist of:
Identify the optimal capacity level of the system that minimizes its overall cost.
Evaluate the impact of the possible alternatives for modifying the capacity of the
system would have in the total cost of it.
Establish a balanced ('optimal') balance between quantitative considerations of
costs and the qualitative aspects of service.

We need to pay attention to the time spent in the system or in the queue:
Customers' patience depends on the specific type of service considered and that can
make a customer 'abandon' the system.
Queue capacity: It is the maximum number of customers that can be queuing (before
to start being served). Again, it can be assumed to be finite or infinite. The simplest, at
effects of simplicity in calculations is to assume it infinite. Although it is obvious that in the greatest
In real cases, the capacity of the queue is finite, it is not a major constraint to assume it.
it is extremely unlikely that customers will not be able to enter the queue due to having
reached that limit number in it.
Queue discipline: It is the way in which customers are selected to be served.
the most common subjects are:
The FIFO (first in first out) discipline, also called FCFS (first come first served): according to the
the customer who arrived first is attended to first.
The LIFO (last in first out) discipline, also known as LCFS (last come first served) or
queue: which consists of attending to the customer who arrived last.
The RSS (random selection of service), or SIRO (service in random order), which selects the
randomly selected clients.
STRUCTURE OF A QUEUING SYSTEM
Single channel waiting line
Each customer must go through a channel, a station to take and supply the order, to place the
order, pay the bill and receive the product. As more customers arrive, they form a line of
They wait and hold on until the station is free to take and fill the order.
They use probability distributions to provide time estimates for:
Average client delay
2. The average length of waiting lines
3. The use of the workplace
Queue: A queue is the resultant effect in a system when the demand
of a service exceeds the capacity to provide that service. This system is made up of
a set of parallel entities that provide a service to transactions that
randomly enter the system. Depending on the system in question, the entities can be
cashiers, machines, traffic lights, cranes, etcetera, while transactions can be:
clients, parts, cars, boats, etc. Both the service time and the entries into the system
they are phenomena that generally have associated sources of variation that are found outside
the control of the decision maker, in such a way that the use of
stochastic models that allow the study of this type of systems.
3.4.2 Simulation
The simulation is the representation of a process or phenomenon through a simpler one, which
it allows you to analyze its characteristics; but simulation is not just that, it is also something very
everyday life, nowadays, can be from a simulation of an exam, which the teacher conducts for her
student for a ministry exam, the production of textiles, food, toys, construction
infrastructure through models, to the virtual training of pilots
combat.
Recreational applications, now very widespread and improved mainly by advancements in
these fields are specially designed to create a hobby that breaks the routine
to the human being, and that the best of the cases otherwise would be impractical due to its cost.
These consist of creating artificial environments and decorations with sound in some cases, that
they achieve a perfect simulation of any type of content, creating the perfect pastime
One of the main futuristic simulation projects, although very costly, is in the field
of physical disabilities, as its design would have to include, especially in the field of
the blind, special sensors that, when adapted, would achieve a simulated vision of the
land allowing to provide vision (in this case) to those people, even in some cases,
to endow with superior powers to the human ones through this real simulated reality
time.
Another factor that would help these disabled individuals is the training of doctors, in which
a station is used that receives data from the tools that the doctor handles, the same as
What the doctor will use in a real operation, to process them and generate a photorealistic image.
on a monitor in such a way that nothing distinguishes it from a real operation. This system has a large
interest since it is cheaper to train future specialists in this way than with operations
real, in addition to allowing many more people to learn or improve their skills since
It's just a matter of acquiring more machines that can operate with much longer shifts.
more flexible than actual operations.
One of the most interesting projects in virtual system simulation is related to
musical composition, which is also a particular hobby of people these days.
Through a database, control of one or several keyboards is exercised at the same time, this
control integrates with a music creation program that automates chord generation,
but with a great advantage, since the control is carried out in a much more intuitive way, given
that the sounds vary as the glove moves through space. Here it is
where one of the advantages of virtual reality lies, that is, the ability to smooth out the
interface between the user and the application, a synthesizer in this case, so that it can extract the
greater potential without the way of handling it being an obstacle.
Numerical simulation. The Finite Element Method
The market giants have forced companies in recent years to implement all
those technologies that can make the three great objectives of modern design a reality:
Design to achieve manufacturing at a competitive cost.
Design in order the actual use in service.
Design well on the first try.
In this sense, the introduction of CAD (computer-aided design) is already representing a
significant progress in the conceptual design stage of new products. In contrast, the C.A.E. is
finds in a much more primary stage. however, the true reduction of the loop
design-development occurs when both techniques act jointly. The first for
define the product and the second to simulate its behavior under service conditions,
Only the combination of both techniques makes it possible to achieve the three objectives mentioned earlier.
mentioned.
The great evolution of computer methods in both their hardware and software aspects,
has allowed us to tackle the resolution of complex mathematical physics problems whose analytical resolution
it would be practically impossible. In fact, many of those problems have been around for years.
they are laid out, it only remains to find an appropriate means for obtaining practical results. So
well, the simulation tries to reproduce reality based on numerical resolution through
computer, of the mathematical equations that describe that reality. Therefore, it is necessary to
to assume that the simulation is as accurate as the initial equations and the ability of the
computers to solve them, which sets limits on their use.
Through numerical simulation, it is possible to generate solids with almost real aspects, to verify their
behavior under various working conditions, study the joint movement of groups
of solids, etc. This allows for a much deeper understanding of a product before it
they physically exist, making it possible to detect many of the problems that otherwise would
they would have detected in the royal service.

The finite element method is one of the most important simulation techniques and
surely the most used in industrial applications. Although its use is extensible
to a multitude of physics problems, below I present some applications of the field
mechanic.
3.4.3 Decision Trees
The decision tree is a diagram that sequentially represents conditions and actions;
show what conditions are considered first, second, and so on.
This method allows showing the relationship that exists between each condition and the group of actions.
permissibles associated with it.
A decision tree is used to model discrete functions, where the goal is to determine
the combined value of a set of variables, and based on the value of each of them,
determine the action to be taken.
Decision trees are usually constructed from the description of the narrative of
a problem. They provide a graphic view of the necessary decision-making, specifying the
variables that are evaluated, what actions should be taken and the order in which the decision is made
The decision will be made. Every time a decision tree is executed, only one path will be
followed depending on the current value of the evaluated variable.
The use of the decision tree is recommended when the number of actions is small and they are not
all possible combinations.
Use of decision trees.
The development of decision trees has benefited analysts in two ways. First of all, the
the need to describe conditions and actions leads analysts to formally identify
the decisions that must currently be made. In this way, it is difficult for them to overlook
any stage of the decision-making process, regardless of whether it depends on quantitative variables
or qualitative. Trees also force analysts to consider the consequence of the
decisions.
It has been shown that decision trees are effective when it is necessary to describe
problems with more than one dimension or condition. They are also useful for identifying the
critical data requirements surrounding the decision-making process, that is, the trees indicate
the datasets that the management requires to formulate decisions or take actions. The
the analyst must identify and create a list of all the data used in the process of
decision, although the decision tree does not show all the data.
If decision trees are built after completing the data flow analysis,
then it is possible that the critical data are defined in the data dictionary (the
which describes the data used by the system and where they are employed). If they are only used
decision trees, then the analyst must be certain to accurately identify each
necessary data to make the decision.
Decision trees are not always the best tool for decision analysis. The
decision tree of a complex system with many sequences of steps and combinations
conditions can be of considerable size. The large number of branches that belong to
multiple trajectories constitute more of a problem than an aid for analysis. In these cases the
analysts run the risk of not determining which company policies or strategies are the guide
for specific decision-making. When these problems arise, then it is time
to consider the decision tables.