The Capacity Planning And Timing Strategy Essay

This study discusses a instance survey on capacity planning and installation location at Georgia Pacific a company that has undergone growing. The instance survey illustrate the importance of growing and its relationship to the environment. The study foremost get down with discoursing what capacity planning and control is, so looks at capacity-timing scheme Georgia Pacific used in the instance survey and the factors that influence this scheme. Then looks at major factors that it used to do its capacity enlargement determination and what other factors might the company have considered.

The study so farther explicate the technique Georgia Pacific used to do its installation location determination and what other installation factors might the company have considered. Besides the study looks at how environmental considerations affect capacity planning and installation location at Georgia Pacific and in conclusion in my ain sentiment explain if Georgia Pacific has made the right capacity planning and installation location. Finally the study concludes with Georgia Pacific production manner, the mode in which the company operates as a squad, its environmental consideration and determination devising procedure.

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Definition on capacity planning

In operations direction, capacity is referred as an sum of the input resources available to bring forth comparative end product over period of clip ( www.managementstudyguide.com ).

Strategic capacity planning is of import in an administration chiefly because it facilitate the administration to run into its future demand of the company. Planing besides warrants operation cost are kept at a minimal degree without impacting the quality, it besides guarantee that administration remain feasible to achieve its long-run program for enlargement. Lagging, degree checked class work for, long term, short, term

Capacity planning and timing scheme

Long scope capacity planning and command chiefly depends on a scope of factors. At the instance study some of the factors Georgia-Pacific used to transport out its capacity planning were base on alterations in market status, engineering and equipment.

3.1- Market conditions:

The timing of the market and doing a determination base on the market gives the administration a competitory border every bit good as an addition in market portion. Georgia-Pacific have used these scheme to increased its production capacity base on the alterations in the market, as the market grew production was increased so as to run into the demand. ( alterations depends on it capacity is can be either lagging, , degree or trailing class work )

3.2- Technology:

The alteration in the engineering means administration, required fewer resource to run its production at Georgia Pacific this means that with the progress engineering such as the optical masers and computing machines used in the sawmill will bring forth more timber and fewer sawdust hence addition its production ability with merely little equipment alterations.

3.3- Equipment:

In order to accomplish big additions in production capacity and present the clients with high quality merchandise, Georgia-Pacific invariably invest in bettering the already bing equipment, or put up beforehand new equipment.

Factors make up one’s minding the enlargement

The timing in doing a determination to spread out a concern is critical, as you need to carefully analyze the financial benefits of such enlargement such as measuring holding the hard currency for the investing to provide for the new equipment or installations and every bit good as the extra stock list,. At Georgia-Pacific the assorted factors considered for illustration in make up one’s minding whether to purchase and spread out the sawmill in Florida are market status, natural stuffs, environment, economic sciences labour and equipment.

4.1- Market conditions:

The status of the market is a major factor to see in doing determination to spread out concern. Excellent market status such as growing and population provide an border over rivals, for illustration Georgia Pacific considered to purchase Florida sawmill because Florida has an first-class market status such as rapid growing of population and roar in place building, and due to this strategic place of Florida gave Georgia-Pacific an border.

4.2- Raw stuffs

The handiness of the needed natural stuffs are really of import factor to see in capacity enlargement in the instance survey since Georgia Pacific depends on natural resource it considered Florida site because it ain wood in the country that besides had other place of in private owned lumber.

4.3- Environment

That the other major factors to see in doing determination for a concern capacity enlargement is statute law and authorities policies sing the environment, at the instance survey Georgia Pacific considered this factor and assessed the environmental ordinance for illustration Florida and happen out that Florida has more rigorous environmental ordinances that make it difficult to construct a new works than to get an bing works.

4.5- Economicss.

Economic is another a major factor to considers when be aftering for capacity enlargement as this affect the economic viability of the organisation. Georgia Pacific has considered this factor by analyzing the return on investing when geting installations and found out that geting and spread outing was much easier and economically feasible than constructing new installations.

4.5- Labor.

The handiness of labour both accomplishment and unskilled is indispensable when sing doing a determination for capacity enlargement. As for Georgia pacific the nearby installation mean that the sawmill could pull some trained forces.

4-6- Equipment.

As for a long term capacity enlargement the handiness of equipment to transport the operation is a major factor to see. In the instance survey Georgia Pacific uses beforehand equipment such the computing machine In the paper factory help to pare the paper axial rotation into smaller for less waste and the optical maser at it & amp ; acirc’s sawmill to bring forth more timber. Besides the already bing sawmill had the indispensable needed equipment and installations such a working route system, a nearby rail route goad, and electricity installations.

What other factors might the company have considered

Other factors include

Facilities location determination

The determination on where to turn up installations is the most of import factors in capacity planning and its where the success of the company depends. Facility location involves administration seeking to turn up, relocate or spread out their operation, the determination procedure encompasses the designation, analysis and rating of a choice among alternate, ( commendation )

At the instance survey Georgia Pacific installation location largely involves long term committedness of resources and therefore the determination on where to turn up installations are chiefly affected by several factors such as, capacity, economic, engineering every bit good as political, and societal.

However in the instance survey Georgia pacific corp. the chief focal point of consideration are natural stuff, market status, labour force, authorities ordinance and policies and eventually energy public-service corporations

6-1- Market status.

Anlaysing the status of the market is really of import factor in installation location determination. Georgia Pacific asses the market status by appraising so every bit know the demand and topographic point the merchandise near to the location. An first-class illustration is the OSB works at skipper ( instance survey ) .

6.2- Raw stuffs.

The handiness of natural stuff is besides of import fact at installation location determination. Georgia Pacific review the handiness of natural so as to hold equal supply of locally available natural stuffs at a low monetary value.

6.3- Government ordinance.

Government ordinance is of import factor in installation location determination. Georgia Pacific choose where the province and local authorities welcome companies by looking at factors where they have relax revenue enhancement and environmental policies every bit good as attitude of the local towards industry such as Florida.

6.5- Labor-

The handiness of work force both accomplishment and unskilled is another critical factor to see in installation location determination. In the instance survey Georgia Pacific assess the handiness of local work force that can be easy train.

6.6- Utilities

Georgia Pacific have considered the handinesss of all public-service corporations necessary such as such as H2O, electricity and natural gas.

Other factors that Georgia Pacific could hold besides see could be the handiness of less expensive land with a bigger infinite every bit good as land with quality and efficiency installations such as such as roads, telecommunications and energy systems Besides at that place other important factor that George Pacific could see could be the cost of transit in footings traveling the merchandise every bit good as the supply cost. For illustration propinquity to supplier can be first-class for JIT production as it improves public presentation of bringings and reduces stock list every bit good as cut downing cost.

Other consideration

Land cost

Site development cost

Handiness of electrical power, H2O and service

Adequacy of main road and rail system

Environmental concerns

Environmental consideration

In general environmental consideration has a large influence in capacity planning and installation location. Since Georgia Pacific depends on lumber as a natural resource, It is paramount that it & amp ; acirc ; ˆ™s environmental friendly,

Georgia Pacific therefore asses the environmental influence on their determination to spread out bing installations or the new installation for illustration purchasing the bing sawmill in Florida was much more easier than constructing new 1s because of rigorous environmental policies in

Florida

In forestalling pollution Georgia Pacific has committed itself to turn up stuffs near to site to cut down transit pollution, burn under the right metrological to cut down the hazard of wild fire and in conclusion Georgia Pacific has intervention installations for waste H2O for all its works.

Georgia Pacific has besides commits itself to efficaciously utilize fabrication waste and its by merchandise, to bring forth about 60 % of its energy demand in all its works.

Opinion on Georgia Pacific

It is believe that Georgia Pacific has made the right capacity planning and installation location determination

Base on the undermentioned grounds

First Georgia Pacific worked as squad and asses possible addition in capacity by beging proposal and obtaining information on major factors such as market demand, natural stuff, engineering, equipment and labour ( instance survey ) and do sound determination base on these factors

Second Georgia Pacific chief accent was the market status and the natural stuffs chiefly because they focus the merchandise demand and when of all time demand additions Georgia Pacific respond with purchasing and acquisition

Third since Georgia Pacific depends on lumber as a natural resource they have carefully selected location for installations enlargement were environmental policies were less rigorous such as the sawmill in Florida.

Finally Georgia had committedness in cut downing pollution of transit as good recycling its waste and used partially for energy and due to the above grounds its believed that Georgia Pacific has made the right picks in put to deathing a well program capacity planning and installation location.

Decision

Capacity planning is of import factor in an administration chiefly because it facilitate the administration to run into its future demand of the company

In the instance survey Georgia Pacific capacity planning is a long term and the accent is on growing and so capacity addition and acquisition is a manner of life. The addition in capacity are chiefly assess depending on factors such as market demand, natural stuff, engineering equipment and labour. Environmental consideration in choosing facilitiy location for capacity enlargement in footings pollution is critical.

All the above factors listed on this study are really important when doing capacity determinations and if assed and implemented right ensures economic viability of the organisation.

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