Choose a capacity constraint for a manufacturing or service operation, for instance: facility

Choose a capacity constraint for a manufacturing or service operation, for instance: facility size & organization, labor availability, product constraints, supply chain constraints, or others. Clearly state the constraint that you have chosen. Briefly discuss how uncertainty affects capacity decisions for this constraint and how you would deal with it. (e.g., suddenly increasing or decreasing demand for your product, major change in the availability of labor, a local supplier goes bankrupt, others). Include any personal experiences you have with this type of issue.

Expert Answer

The Capacity constraint issue I have faced is Labour Availability

I worked for the site as Operations Manager. The operations involved machine as well as manual work. The machine output was much higher compared to labour output. The ratio of labours required for machine operation & manual operation was 1:5. However, as the demand was highly fluctuating due to seasonal characteristic of product, the permanent labour was limited. It was not possible to keep high manpower as for most of the time of the year, they will be idle and increase the cost of operation.

To tackle such an issue, following was done:

  • The demand forecast was taken for next six months. Basis the fluctuations and peak demand, the production was planned in such a manner that inventory may be built up in advance and support peak demand in coming months. Thus, averaging out was done using Chase strategy
  • In case of high demand, there was contract with temporary workers group. Hence, whenever, additional manpower was required, they were hired to support operation. So, it use to increase the capacity
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