Long Term Manufacturing Capacity Strategies

If we could only predict the future, business planning (and life in general) would be much easier. A manufacturing capacity strategy is based on a number of assumptions and predictions about long term market, technology, and competitive behavior. Key factors include:

- Predicted growth and variability of primary demand.
- Costs of building and operating different sized plants.
- Rate and direction of technological evolution.
- Likely behaviour of competitors.
- Anticipated impact of global competitors, markets, and supply sources.

A capacity strategy is a major element of a firms manufacturing strategy. The capacity strategy must be based on corporate and business philosophies, preferences, and market driving forces. At the same time, the capacity strategy should reinforce other strategies and objectives adopted by the firm.

There are three macro alternatives for capacity expansion strategies: Capacity can lead demand, lag demand, or attempt to remain in an approximate equilibrium with demand. Many factors including cost of capital, logistics costs, and the ability to supply within the dynamics of a particular market, help to identify the appropriate capacity strategy.

Synchronous experts are well positioned to help you integrate your demand planning, manufacturing, and supply chain strategies and develop an appropriate long term capacity strategy. Send us an information request at Sales@SynchronousLLC.com , or review our portfolio of service offerings at our web site www.SynchronousLLC.com .