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Capacity planning is to determine how much a firm should be able to produce of a product or services. Capacity is a measure of an organization's ability to provide customer with the demanded services or goods in the amount requested and in a timely manner. (Micheal, A and Stewart. J, 2005). For example, In the organization the capacity would be the capability of a known system to produce the output within the specific time period. It also influential best utilization of resource and plays an imperative role decision-making development.
In these organizations the capacity planning has a problem that was seasonality. As Slack et. al. (2001) states, it may have wide gap between demand and capacity at a given period of time leads to imbalance in the business. For example, In the ice-cream manufacturing through the winter season ability 'resources and labour force' surpasses the demand 'due to the cold weather'. This condition suggests high costs and inefficiency of the business process. In resolving the problem with seasonality a business first wants to measure aggregate demand and capacity through forecasting possible variations in demand over time so that it can plan its capacity as a result.
Strategic capacity planning is an important as it helps the organization in meeting the upcoming wants of the organization. Planning make sure that operating cost are sustained at a minimum possible level without affecting the quality. It make sure the organization remain competitive and can realize the long-term growth plan. In this capacity planning strategic main mainly focus long term capacity, and low term capacity. (Barahona, F., Bermon, S., 2005).
The long term capacity of an organization is shares primarily to strategic issues connecting the organization's most important manufacture facilities. Furthermore, long-term capacity issues be situated organized with location decisions. Technology and transferability of the method to new products is also tangled with long-term capacity planning. Long-term capacity planning may well progress when short-term changes in capacity are not enough. (Cochran, K., and Alberto, U, 2005)
For example, based on diagram 1, the firm's adding of a third shift to its current two-shift arrangement unmoving does not produce enough output, and subcontracting arrangements cannot be made, one feasible choice is to add capital equipment and adjust the outline of the plant as long-term actions.
In the short term, capacity planning concerns issues of preparation, labour shifts, and matching resource capacities. The objective of short-term capacity planning is toward handle sudden shifts in demand now an efficient economic method. The time structure for short-term planning is regularly simply a few days but may well run as long as six months. (Birge, J. R, 2000)
For example the alternatives way for making short-term changes in ability are fairly numerous and can even comprise the decision to not convene demand at all. Based on the diagram 2, the at ease and maximum commonly-used method to improve to capacity in the short term is working overtime. This is a flexible and reasonable alternative. While the convinced takes to pay one and one half times the even labour rate, it give up the cost of hiring, training, and paying additional benefits. If overtime does not offer enough short-term capacity, other resource-increasing another possibility are available. These take in adding shifts, employing casual or part-time workers, the routine of floating workers, leasing workers, and facilities subcontracting.
Instead of benefit in capacity planning there more to monitor cost because takes into account personnel, facilities, production schedules and supplies. When the capacity level is carefully planned, the company can monitor costs during periods of growth and recession. Being able to see projected capacity needs allows the company to budget for upcoming changes, and apply financial resources where needed. (Slack, N., Chambers, S, et al, 2000).
In other way, production cycles can use capacity planning to maintain proper production levels during expected business cycles. For example, if your company traditionally sees an increase in orders during the summer in anticipation of the Christmas season, then you can use historical data to plan production capacity and have ample staff on hand to handle the rise in demand.
The next benefit that can use is new location, where the company grows we need to find new production facilities. Capacity planning information from your existing locations, you can develop a more accurate projection of needs for facilities and personnel levels, and of the kind of production that can be expected from the new location. This is a valuable tool when putting together the business plan and budgets for the company's growth.( Ritter, T., Wilkinson, I., 2002)
The elimation on capacity planning also have disadvantages and risks losing a major customer can severely affect the reputation of Manychip As a result , matching strategy is proposed to replace lead strategy There are several advantages . Aside from the compatibility with cost structure , Manychip can also address the complexity of dealing with volatile market environment resulting to fluctuation in demand and rapid change in price . With high lead times and various product yields Manychip can also assure quality by not entering the mass production scale that can arise from producing at 10 million units. (Russell , R Taylor , B 2003).
I am find two company with to show on customer value or customer expectetion in same industry which movie theaters such as Golden Screen Cinema and Lotus Five Star. Golden Screen Cinemas Sdn Bhd (GSC) is the leading cinema exhibitor in Malaysia. GSC is a wholly owned subsidiary of PPB Group (a member of the Kuok Group). PPB Group is listed on the stock exchange of Malaysia. It is a diversified group with interests in food industries, environmental engineering, utilities and waste management, property and entertainment.
BIG Cinemas Lotus Five Star is an international cinema chain that is growing fast in Malaysia. The company is a joint venture between BIG Cinemas, a member of Reliance Anil Dhirubhai Ambani Group and Lotus Group. The company began its operations in Malaysia since 2008. BIG Cinemas Lotus Five Star offers an unmatched level of cinema entertainment with the highest level of comfort and latest technology offerings. Movie-goers can now take advantage of Big Cinemas Lotus Five Star brand new facility and catch up on all the latest films.
Based on customer value or customer expectations are concern because both companies are growing in cinema firm. Based on this, the companies are more concern about the service based on e-commerce. For example, Golden Screen Cinema is moving for e-payment, it means online purchasing. Golden Screen Cinema is provided that this ability as an another mode of purchasing movie ticket(s) and makes no representations or warranties of any kind direct or oblique, with high opinion to this website or the information, content, products or services involved in this site including, without limitation, warranties of merchantability and fitness for a particular resolution. From other side, Lotus Five Star just maintain with normal purchasing it is direct purchasing and it also move to take call booking because it will help to satisfying of the customer's.
From this both companies, the similarities are same in the way that delivered their goods and services. In term of services such as room environment, it means a big room enough space to sit and the comfortable sitting place with big screening. Other than that, based on technology part, both companies are providing the 2D, and 3D for the customer satisfaction.
The differences between both companies are Golden Screen Cinema are showing all kind of cinema such as English movies, Tamil movies, Chinese movies, Hindi movies, and Malay movies and moreover. In other side, Lotus Five Star are showing in local movies and are developed in tamil industry. Based on the price of the ticket are totally differences because Golden Screen movies are more expensive than the Lotus Five Star. It just maintain the price because the variety of film are lesser than Golden Screen Cinema.
Lastly, it can say that we need to improve in customer line from we should delivered the goods and services. As of being able to quickly take action to business conditions to reacting to theatrical changes in customer require, the difference of capacity can have devastating results. As we known capacity can result in low return on belongings, confidence damaging layoffs and costly capability closures though too little can result in lost sales and eroding customer constancy. This understanding is able to then make an organization's capital expenses and strategies as they variety a world-class supply chain, develop to against any organization in the world.
From my view, the recommendation for the 1st company is be able to make more customer statisfaction by involving by the environment of cinema place. It can brings more cinema room and accessories. Other than that, it also can move to marketing sites that can go couples cinema thearter room. That can only for couple's view.
From the side, 2nd company can move to e-commerce sites because nowdays internet was one of regular basis in daily life. Customer will more concern about this and company can go for more cutomer's depanding on this services provider. It also make easy to customer were the company provider e- commerce service because customer will happy from the side that reduce transport cost.
Based on the Micheal E Porter diagram, is an arrow directed towards the flow of goods and services. The components of it represent the resources of the company. It shows the overhead functions such as an infrastructure, technology, and procurement being shared by the operations functions such as an inbound and outbound logistics, operations, marketing & sales, and service of the corporation. The arrow denotes the value being delivered and the margin represents what is left over after the resource costs are utilized. Porter's grouped the various business process or activity of an organisation into two main activities that divided the organisation as either primary or secondary activities. These activities incur costs, in combination with other activities provider customer satisfaction.
Primary activities are processes or activities directly involved in the provision of the good and services, the organisation makes or provides such as inbound logistics, operations, outbound logistics, marketing/sales and after sales service.
Secondary activities that support the primary activities by providing necessary support and resources, but not directly involved in the provision of the good and services the organisation makes or provides such as infrastructure, human resource management(HRM), technology, and procurement.
From these two main activities there are nine activities are following the grouped. Firstly, inbound logistics that business process which receives, handle and store inputs. For example the materials handling, warehousing, inventory control, transportation. These will acquire feature film titles of the latest blockbusters for all the cinemas in 16 locations, video store as well as television station from the distributor companies.
The second activities are operation, it the process of business which delivers the convert input to output. For example, staff, materials and machines used to assemble the final product. It also can be the way there manual ticket selling counters operations, phone booking and online reservation ticket counter operation, ticket collection at check-in point operation and foods, snacks and drinks selling counter operation.
Next activities are which deliver the actual product, when it leaves the organisations. For example, it will be outbound storage and transport of goods of the customer, in the way that ticket issuance to patrons and collection of money.
The following activities are marketing and sales. In these activities, processes of selling, researching customer needs and development of an effective marketing mix. For example, there more concern about 4P, it means price, product, place, and promotion to satisfy customer. The buyer to purchase the ways to selecting the channel of distribution of the film purchased to cinema, video store and television station.
Furthermore, the sales services which processes that deal with returns, complaints, customer support after the product or services has left the organisation. For example, those activity are maintain and enhance the product value are such as helping customers toward find their particular seats.
The following activities are procurement that can manage and negotiate the acquisition of resources for the primary activities. It also to ensure resources that are required in the right place at right time with right cost. For example, Procurement is where the organisation purchases the booking facilities, the iSMS facilities to enable the movie reservation system, to obtain the movie plan system and the films.
Next, technology development processes required for innovation, product design, and testing or the invention of new processes. For example, technological development contain the study and development of a well-organized cinema operating system such as the iSMS system used in the organisation presently qualify user to replacement ticket and develop a recommendation of the next accessible show time if the while requested is fully used.
The next, is the human resource management processes that to obtain and look after the organisation most valued assets that could be staff. For example the human resource management related with hiring employees for front end and back end operation such as ticket seller and movie attendant, improvement of employees by giving them training before beginning of work, and incentive for employees such as issuing salary, EPF and SOCSO deduction, overtime claim and others.
The last activities of the diagrams are infrastructure that to support of the whole of the value chain and not belonging to any of other eight categories of the processes above. For example these activities are that maintenance the organization stability and sustainability are such as financial policy, accounting, capital, legal documents and moreover.