SOM 306 Chapters 5 & 6: Capacity Planning, Process Selection, and Layout

Comprehensive vocabulary review flashcards covering strategic capacity planning, capacity metrics and formulas, process selection types, facility layout design, and line balancing concepts from Chapters 5 and 6.

Capacity

An upper limit or ceiling on the load that an operating unit can handle, measured in physical units or number of services.

Goal of strategic capacity planning

To achieve a match between an organization's long-term supply capabilities and the predicted level of long-term demand.

Capabilities

The kinds and characteristics of output that an organization is able to provide.

Out of balance capacity

A gap between current capacity and desired capacity.

Overcapacity

A condition resulting in operating costs that are too high.

Undercapacity

A condition resulting in strained resources and the possible loss of customers.

Design Capacity

The maximum output rate or service capacity an operation, process, or facility is designed for.

Effective Capacity

Design capacity minus allowances such as personal time and maintenance.

Efficiency

The ratio of actual output to effective capacity, calculated as \text{Efficiency} = \n\left(\frac{\text{Actual Output}}{\text{Effective Capacity}}\right) \times 100\%

Capacity Utilization

The ratio of actual output to design capacity, calculated as $\text{Utilization} = \left(\frac{\text{Actual Output}}{\text{Design Capacity}}\right) \times 100\%$

Leading capacity strategy

A strategy where capacity is built in anticipation of future demand increases; preferred if capacity additions require a long lead time.

Following strategy

A capacity strategy where additional capacity is built only after demand exceeds current capacity.

Tracking strategy

A capacity strategy that adds capacity in relatively small increments to keep pace with increased demand.

Capacity cushion

An amount of capacity in excess of expected demand when there is uncertainty about demand, calculated as $\text{Capacity cushion} = \text{Capacity} - \text{Expected demand}$

Capacity planning process steps

An 8-step sequence: 1. Estimate future capacity requirements; 2. Evaluate existing capacity and facilities and identify gaps; 3. Identify alternatives; 4. Conduct financial analyses; 5. Assess qualitative issues; 6. Select the best long-term alternative; 7. Implement; 8. Monitor results.

Goal of process selection

To match processing capability with expected demand.

Cellular manufacturing

A layout configuration that offers low cost and flexibility through fast processing, reduced setup time, less work-in-process, and production in small batches.

Process layouts

Layouts where machines and activities are grouped into departments based on function, common in non-manufacturing and intermittent operations, with lower equipment utilization due to high product variety.

Product layouts

Layouts where workstations are arranged sequentially along a production line, utilizing division of labor and requiring less-skilled workers performing narrow tasks.

Service process matrix

A tool that is useful for organizations contemplating strategic changes in service operations.

Balance delay

The percentage of idle time for a production line.

Cycle time

The maximum time allowed at each work station to complete a set of tasks.

Minimum cycle time

The minimum possible cycle time for a line, which is equal to the time of the longest single task.

Fixed-position layout

A layout type in which the product remains in a stationary position while workers, materials, and equipment are brought to it (e.g., used to build a submarine).

Product or service profiling

The method of linking key product or service requirements directly to process capabilities.

Muther closeness grid symbol 'A'

The code symbol indicating that closeness between two locations or departments is 'Absolutely necessary.'

Muther closeness grid symbol 'U'

The code symbol indicating that closeness between two locations or departments is 'Unimportant.'

Flexible manufacturing system (FMS)

A group of machines involving supervisory computer control and automated material handling.

Group technology

A manufacturing philosophy often related to cellular manufacturing that involves identifying and grouping parts into part families based on similar design or processing requirements.