Assessing and Improving Beck’s Manufacturing Capacity

Determining the current Beck’s Manufacturing Capacity and establishing how it can be increased without Purchasing a New Equipment.

Introduction

Capacity is measured to determine the amount of output a system that could be a machine or an operator is capable of producing within a specified period. All companies should measure their production capacities in order to manage them properly so as not to incur unnecessary production costs and to operate strategically (Murray, 2017; Marvel, Schaub & Weckman, 2008). One aspect of operations management is to increase a firm’s productivity while reducing production costs and increasing the firm’s flexibility to fulfill the changing customers’ needs. The challenges that are realized in operations management include designing a production system that is able to produce outputs of the required quantities within the allowed period and also determining how the system created can be changed to be capable of matching with market changes (Reference for Business, 2017). In this study, the capacity of the Beck Manufacturing Company will be determined and establish how the capacity can be increased using the operations data provided without purchasing a new equipment. The discussion ends with a conclusion that sums up the findings.

Calculating Capacity

Capacity is measured by either combining inputs and outputs or using them independently. Determining the capacity of the Beck Manufacturing Company, the capacity of each operation can be numerated by dividing the number of machines over the time taken to process a product. The maximum capacity will be established by identifying the bottleneck of the system. Table 1 below shows the computations

OperationNumber of MachinesRun Time per piece (min)% Reject RateCapacity
Milling5235/2=2.5
Grinding7357/3=2.3
Boring3123/1=3
Drilling62.576/2.5=2.4
Total capacity of the facility is 2.3 per minute of every shift which is equivalent to the capacity of the bottleneck which is the Grinding operation2.3output/min/shift

Table 1 showing the computation of the capacity of each Beck’s machine and the capacity of the whole system (Vonderembse & White, 2013)

Capacity Expansion

From a strategic point of view, organizations use different approaches to address an increase in demand. One approach is adding the capacity before the increase is realized and this enables the firm to be ready to meet the high demand without any capacity development issues. More so, the firm will gain a competitive advantage at the time. However, the problem with the approach is when the anticipated demand fails to materialize and the capacity created is not flexible to produce another product that is in demand. The other approach that the company would do to manage the risk, is to increase the capacity when the extra demand has materialized. By choosing this approach, the company will also avoid jeopardizing the good relation it has with its creditors and investors. Nevertheless, the company may lose out competitively and fail to make sales during when the capacity is being expanded. The third method that can be used is making smaller expansions that match with demand increments. In this regard, a manager needs to understand its manufacturing capacity in detail and exhausting it as much as possible and having a thorough knowledge of the market (Murray, 2017).

Milling 2.5           Grinding 2.3           Boring 3                  Drilling 2.4

Figure 1 showing Beck’s flow of operations

Based on what has been gathered above, if Beck wants to expand the capacity of the whole system shown in Figure 1 above, it should focus more efforts on the inputs of the Milling operation because it is where demand is measured. Based on the demand statistics, the company can make certain adjustments that are not expensive for instance, the efficiency of the Grinding operation can be improved by increasing their maintenance, grinding machines can be made to operate more during the two shifts by extending run time by 2hours for example, or even adding an extra another shift. By doing that, the much extra capacity the company can get by employing the less expensive approaches is 2.5-2.3= 0.2/min/shift. By doing this, the Grinding operation will have an equal capacity with milling operations, which is 2.5 and this capacity is less than that of Boring, which has 3. However, Drilling operation has a capacity of 2.4 implying that the company will only need to reduce the extra capacity to 2.4 in order not to have another bottleneck (Vonderembse & White, 2013).

Assessing how Beck’s System Capacity can be increased without Purchasing New Equipment

Vonderembse & White (2013) educate that it is important to know how much capacity can be added to a production system without creating a bottleneck. More so, it is important to exhaust the less expensive approaches because it is risky to purchase new equipments to increase system’s capacity. IQMS (2015) informs that manufactures commonly use two ways to meet an increase in demand without adding new equipments. One is noted to be maintaining the status quo in regards to the current operations and business processes while exhausting the less expensive approaches, which include- adding shifts, introducing overtime, increasing machine maintenance, and others. Another approach is to understand the whole system’s capacity and utilizing it to the fullest. The effort would include eliminating/reducing waste like Beck’s reject rates in every operation are quite high and they need to be reduced/eliminated by employing the required solutions. That can be achieved by employing interventions such as- process traceability, increasing process efficiency, and others.

Conclusion

The main objective of this paper was to determine the capacity of Beck’s manufacturing plant and establish how the capacity can be increased without purchasing new equipment. Currently, the system has a bottleneck, and is the Grinding operation, thus the capacity of the whole system, is 2.3outputs/min/shift. Using the less expensive methods, the capacity can be increased because the difference between the Milling capacity and Grinding is 0.2. However, because of the bottleneck at the Drilling operation that has a capacity of 2.4, the extra capacity that can be added at the Grinding operation is 0.1 without having the need of purchasing new equipment. To meet an increase in demand, Beck needs to use efficiently its operations especially by reducing the rate of rejects and perhaps increasing the number of shifts.

References

IQMS (2015). Measuring ERP. Retrieved< https://www.iqms.com/products/whitepapers/erp-to-increase-plant-capacity.pdf>.

Marvel, J. H., Schaub, M. A., & Weckman, G. R. (2008). Assessing the availability and allocation of production capacity in fabrication facility through simulation modeling: A case study. International Journal of Industrial Engineering, 15(2), 166-175

Murray, M. (2017). Supply chain management- Measuring capacity in manufacturing. Retrievedcom/measuring-capacity-in-manufacturing-2221213“>https://www.thebalance.com/measuring-capacity-in-manufacturing-2221213.

Reference for Business (2017). Operations management. Retrievedhttp://www.referenceforbusiness.com/small/Op-Qu/Operations-Management.html.

Vonderembse, M. A., & White, G.P. (2013). Operations management . San Diego, CA: Bridgepoint Education, Inc.

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