Strategic capacity management: Meeting technological demands and performance criteria

Although manufacturing contributes a large part to the current performance of companies, few companies deal systematically with issues related to strategic capacity management. As well as decisions on outsourcing and acquisition of resources, this involves triggering process innovation, process development and improving performance by adapting organizational structures. Action Research in companies reveals the importance of capacity management at a strategic level as well as the implementation at tactical and operational levels. The methods of Strategic Capacity Management, as proposed in this paper, provide an industrial company with tools for implementing its manufacturing strategy. Only the design of organizational structures has received attention in the past--little research has been done in the area of manufacturing technology and integral models for sourcing. Through matching product configurations with product-market strategies and product development, the methods point to areas of improvement. The new methods include decision-models for outsourcing and capacity management, product development, and a manufacturing technology scan. All the methods deploy performance evaluations as a base for selecting alternatives to define improvements. These improvements lead to decisions on investments for resources, resource utilization and development of processes, including initiation of manufacturing technologies, as demonstrated by four case studies.