MIS 373 Blog 2

The three topics of the second week of MIS 373 course are reliability, strategic capacity planning, and quality management. These concepts are important to companies and organizations in order to increase competitiveness and management. Reliability is a kind of probability, which could help companies realize their ability to perform their intended function under certain conditions. Strategic capacity planning helps companies and organizations achieve long-term supply capability to match predicted level of long-term demand. Quality management help companies identify the appropriate product or service to meet customers’ expectations. Of these topics, strategic capacity planning gave me a deep impression. As I was reading these articles, I found capacity problem is to be one of more important aspects that companies should be concerned about.

I read a paper entitled When Supply-Chain Disruptions Matter this week. The two authors of this paper identified some factors responsible for disruptions to companies. They stated disruption matters in the magnitude of disruption’s impact on the share price; internal disruptions are far more damaging than external factors; “a higher rate of improvement in operating performance aggravates the impact of internal disruptions”. Managers should focus on reducing buffers and excess capacity. To reduce these disruptions, companies should use strategic capacity planning.

Through capacity planning, companies can identify the kind of capacity needed to reduce excess capacity and also meet customer demand. In addition, capacity decisions are strategic. It could affect operating costs, ease of management, and competitiveness. In this paper, the authors believe that improve operational efficiency could improve firms’ agility and allow them to respond more effectively to a disruption. I think companies could also use these three capacity strategies- leading, following, and tracking. Companies should realize future demand to build their capacity and be able to build capacity when there is excess demand. These strategies could also help companies deal with disruptions.

Strategic capacity planning can help companies solve problems and handle disruptions. Overcapacity results in higher operation cost and increases internal problems. Companies should use strategies capacity planning to improve their effectiveness and competitiveness.

Reference:

• PowerPoint Slides Chapter 4,5,9
• http://www.hbs.edu/faculty/Publication%20Files/13-006_cff75cd2-952d-493d-89e7-d7043385eb64.pdf