First of all, capacity refers to the upper limit or ceiling on the load that an operating unit are designed for. And the strain might be volume of physical products produced or amount of service produced. (Stevenson, 2009). Corresponding to Eng. Abdel Moniem shehata, he said that capacity is usually something to control. He added that capacity planning is not necessary to be frustrating or expensive. And any company will use the capacity planning depending on its tools and resources. According to BMW, the Company owns staff, machines, tools, anatomist and materials and etc, and they have to work with all this resources to increase efficiency and take full advantage of it to attain high capacity.
When Mr. Abdel Moniem shehata was asked about the value of capacity decisions towards BMW he said that a lot more capacity the more profit the business will gain and the bills will be decreased as BMW entails manufacturing so that it is important to set a capacity planning because the foundation of income of BMW comes from selling vehicles. However, Capacity is important because it deliver benefits and revenue a lot more than what was expected. Mr. Abdel Moniem shehata said that capacity is very important as it affect and also have impact on BMW as a firm and its vehicles. It also impacts competitiveness and he said that he considers that the most in close proximity to rivals to BMW are Mercedes and Volkswagen as the three brands are Germany and the factories are located near to each other. Alternatively, the organization that has more capacity will have an advantage of delivery speed. He added that capacity decision affects the Operating costs by supporting in reducing operating cost.
There are two different ways to assess capacity which are design capacity and effective capacity. The design capacity is the output rate as the effective capacity is the look capacity minus allowances. Regarding to BMW Eng. Abdel Moniem shehata says about the ways BMW use to measure capacity, that at the beginning of any business a Feasibility research is vital to start with and study it very proper and ensure that it is to reach the profit that your company needs. Afterward things that is vital for production employs like machines, inventories, personnel, engineering, and equipment all these kind of resources which will help in achieving high capacity. Then the budget of the production is putted which includes income and result. Income like investments and expenditures while outcome like earnings and profit that is received. Mainly BMW methods capacity by multiplying the amount of machines or personnel with the number of shift, with utilization and with efficiency.
According to the determinants of effective capacity there are factors that impact capacity. The look of BMW is important like the shape and the size. Also the design can have influence on capacity. According to BMW it's important to produce automobiles with the same range apart from different ones. He added that quality of the car can be an important part in the determinants of effective capacity. As by increasing quality the capacity increase as well. And other exterior factors like basic safety, purchasing decisions and inventory stocking decision, each one of these factors have a great impact on capacity.
Any company or group has a capacity formulation bases its capacity strategy on assumptions and prediction. Strategy formulation contains 3 primary phases which are leading, following and tracking. Leading helps in building capacity in a desire of future demand boosts. While following begin to build capacity when demand enhances current capacity. Finally monitoring retains capacity to keep demand increase (Stevenson, 2009). However, BMW can measure the success of its new process by monitoring how long it requires for just one car to be built from the very beginning until it's all done. If vehicles take different of times to be built then it is an indicator of uneven circulation of materials to the development line. One other way is looking at the amount of vehicles that are returned for warranty work. This way of measuring looks at the final product. If suppliers are hurried to complete orders, they might reduce the quality of the products that they are offering to BMW. Once those low quality parts are being used in the manufacturing of a fresh car, the client will see it unsatisfying and it'll be returned back to be corrected.
The capacity planning is performed by the general manager and other people that are in charge of the materials and anatomist as well. There are six steps of capacity planning. The first step is to Estimate the near future capacity requirements, the next step is to evaluate existing capacity, the 3rd step is identify alternatives, the fourth step is to conduct financial analysis, the fifth step is to determine key features issues, as the six step is to execute option chosen, finally, the six step is to monitor results. (Stevenson, 2009). But Eng. Abdel El Moneim said that BMW makes the capability planning in 3 easy steps. The first step is identifying service level requirements; as they categorize the task done by systems and quantify customers' objectives for how those works get done. The second step is to investigate the existing capacity which is important to investigate it to see how it is interacting with customer's needs. The 3rd step is planning for the near future, by forecasting BMW's future business activity and determining it. However, Implementing is important as it ensure that the available capacity will be enough even if any changes happened if the near future.
Finally, when approaching to the analysis of the capacity planning at BMW Mr. Abdel Moniem shehata said that "Evaluations completed to learn lessons that can be used to improve ongoing or future capacity planning efforts are of possibly greater value. Regrettably, improvement-oriented evaluations are seldom carried out. This is a significant shortcoming of evaluation practice, since capacity-development attempts involve a great deal of experimentation, and managers need to find out the results to be able to sharpen or reformulate aims and reorient their activities in appropriate ways. "
In conclusion, for any company to attain a successful planning capacity is to create goals and define goals. The business must ensure that the planning process is carefully known. And if the business found any miscalculation in the plan or the plan is not working, it doesn't imply that the organization has to start out the planning from the beginning but and then correct or improve the parts which include the mistake. BMW creates their capacity planning at least once annually and sometime every six months.
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