Productivity

Capacity Expansion Strategy

An approach to a firm's acquisition of resources that will either lead, lag, or track the customer demand.

Conversion Process

A step or series of steps where value is added to an item or service.

CRP (Capacity Requirements Planning)

The function of establishing, measuring, and adjusting limits or levels of resources (labor and machines).

Design Capacity

The maximum expected output capability of a resource or system.

Effective Capacity

The expected output capability of a resource or system after accounting for scheduled down time (like for maintenance).

Efficiency

A measurement of the actual output relative to the standard output expected (effective capacity).

Frank and Lillian Gilbreth

Considered the founders of modern industrial management who were pioneers of time and motion studies. They also wrote Cheaper by the Dozen.

Frederick Taylor

An American mechanical engineer who sought to improve industrial efficiency. He is considered the father of scientific management.

Henry Ford

American industrialist who developed the assembly line technique for mass production.

Henry Gantt

American mechanical engineer and consultant who developed visual methods to aid in the management of projects.

Lag the Demand

A capacity acquisition strategy where expansion takes place only after the demand materializes and never exceeds the demand.

Lead the Demand

A capacity acquisition strategy where expansion takes place before the demand materializes and never falls behind the capacity growing requirements.

Multi-Factor Productivity

The measure of process output divided by more than one input, where those inputs must be expressed in a common unit of measure, like dollars.

Output

The quantity or amount produced.

Production System

A transformational process that accepts inputs and converts them into the desired outputs.

Productivity

A measure of process output divided by input that helps us determine the effectiveness of the process.

Service System

A configuration of resources that deliver a valuable action or deed, rather than a tangible product, to satisfy a customer need or want.

Single-Factor Productivity

A measure of process output divided by only one input of the many possible inputs required to make the desired output.

Straddle the Demand

A capacity acquisition strategy where capacity exceeds demand after expansion but then falls behind demand before the next expansion installment takes place.

Utilization

A measurement of the actual output relative to the optimal output expected (design capacity).