Optimizing Capacity, Facility Layouts, and Supply Chain Management

Capacity Planning Considerations

Capacity can be stated in terms of inputs or outputs. Planning capacity too low results in unmet demand, while planning it too high results in higher costs.

Facility Considerations

Facility: Permanent, semi-permanent, or temporary commercial or industrial property such as a building, plant, or structure, built, established, or installed for the performance of one or more specific activities or functions. When deciding where to produce (Facility), important factors to consider:

• Proximity to market
• Availability of raw materials, transportation, power, and labor
• Climatic influences and community characteristics
• Taxes and inducements

Facility Layouts

1. Fixed-Position Layout

A layout that brings all resources required to create the product to a central location (large, complex projects such as construction or exploration).

2. Process Layout

A layout that organizes the transformation process into departments that group related processes.

Intermittent organizations: Organizations that deal with products of a lesser magnitude than project organizations; their products are not unique but possess a significant number of differences.

3. Product Layout

Production is divided into relatively simple tasks assigned to workers, who are usually positioned along an assembly line.

Continuous manufacturing organizations: They create standardized products by running assembly lines.

New Tendencies in Operations Management

Technological Advancements

• CAD and CAM (Computer-assisted design and manufacturing)
• CIM (Computer-integrated manufacturing)
• Flexible manufacturing (machines are controlled by computers)

Sustainability

Green operations and manufacturing.

Supply Chain Management

The "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally." The management of the flow of goods and services involves the movement and storage of raw materials.