Capacity Planning (Essay Sample)

Essay
Course no.
Date
Strategic capacity planning
Strategic capacity planning is the evaluation of an organizations capacity requirement to meet the changing demand of its commodities and services. It is actually the rate, of production with respect to time. Poor strategic planning procedures lead some if not all companies to poor performance of failure to meet the set objectives and goals. With the understanding of capacity, planning is essential in ensuring a balance exists between the required and the available capacity. UPS inc. failed by a big margin to deliver Christmas presents and other materials to the intended destinations due to poor planning.
According to , the spokeswoman said that, "The volume of air packages in our system exceeded the capacity in our network," Showing clearly that the company did not employ capacity planning in anticipation of the holiday season. According to Steve Banker (2013), the holiday season stretches most delivery companies’ limits and therefore, a need for prior adjustments when the season nears. For large corporations such as FedEx and UPS, extra planes and personnel are needed in anticipation for the season and as a consequence, their highly automated systems need to be synchronized with the increased capacity. This effectively ties the company to certain operational limits which cannot be adjusted within a short period of time. This means that, if there is a mistake and the planners underestimate the demand, it will be nearly impossible to adjust the capacity within a short period of time and it is exactly what happened to UPS Inc.
Capacity planning dealing with anticipation and potential of an organization can be effectivel...