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The purpose of the present paper is to analyze the capacity management needs and propose a new capacity planning framework for a construction company. The paper examines the capacity profile and proposes a strategy for capacity building based on time horizon; based on individual, business and industry levels; and finally based on components. The paper provides a strategic direction to the company to bid for bigger projects in partnership with prominent players rather than stay focused on smaller projects. The approach recommends ensuring the necessary resource and capital base for the company before it decides to go solo on bigger projects.
INTRODUCTION
Capacity is the amount of available resources or the output achievable to meet the operational challenges over a specified period of time. The capacity of a process is the maximum amount of theoretical output the system can potentially produce or the maximum amount of input the system is capable of processing at the existing resource level. The timing dimension emphasizes that capacity should be viewed from a short range, intermediate range and long range planning perspective and therefore, capacity management occurs at all the three planning levels in an organization i.e. at strategic level, tactical level and operational level. Capacity can significantly influence the quality of products and services and, therefore, it has an influence on the customer satisfaction. Capacity management is undoubtedly one of the toughest management challenges in running an organization. The issue becomes especially important for small to medium enterprises who do not have the required resource base and capital resources to build extra capacity cushions in the organization. The challenge really lies in how to deploy existing resources in an effective and efficient manner in order to meet the operational loads for these small and medium business operations. The objective is to set the capacity of capital intensive resources i.e. facilities, capital, labor at an appropriate level that best supports company's long term vision and helps to achieve short to medium range goals. The capacity level has an impact on response rate, costs, inventory level and various other performance measures. If the capacity in not sufficient, the company will lose customers and may not be able to successfully bid on larger and profitable projects. If the capacity is...