Current and Future Capacity

 01/04/2019
By Dr. Alin Posteucă

Often, one of the first questions that I ask top managers is about the current and future production capacity needed in connection with the vision and mission of productivity.

Successful planning and implementation of strategic Kaizen and Kaikaku for cost improvement requires answers to questions such as:

  1. What is the strategic reserve of production capacity? What is the reason? For example: Is 20% sufficient?

  2. How are overcapacity and undercapacity addressed through Kaizen and Kaikaku?

  3. What is the impact on the unit costs of the annual strategic reserve of production capacity?

  4. How do we plan Kaizen and Kaikaku projects for a good capacity and profitability management?

Losing the battle with real capacity management is a reason to create systemic Cost of Losses and Waste (CLW) and unnecessarily large unit costs.

So, how do you plan the Kaizen and Kaikaku projects for cost improvement in terms of decrising or increasing sales and implicitly the need for real capacity, knowing that any improvement must be effective and efficient? I talk about this deeply in my last MCPD book.

*Source of the article: Alin Posteucă on LinkedIn

Dr. Alin Posteucă is the founder and CEO of Exegens®, a global consulting firm specialized in cost competitiveness improvement and operational excellence. It helps customers create and implement profitable strategies and cost improvement programs that ensure a unit cost improvement of at least 6% per year for each of the next 5 years by maximizing the efficiency and effectiveness of operations.

He is the author of Manufacturing Cost Policy Deployment (MCPD) concept, published in three books at Productivity Press – Routledge/ CRC, New York (USA). The latest, ”Manufacturing Cost Policy Deployment (MCPD) Profitability Scenarios: Systematic and Systemic Improvement of Manufacturing Costs” (October 2018) is based on its main belief that the annual and multiannual target profit can be achieved irrespective of the sales volumes, increasing or decreasing. He is also the co-author of the book ”Manufacturing Cost Policy Deployment (MCPD) and Methods Design Concept (MDC): The Path to Competitiveness”, published at Productivity Press New York (USA), 2017, as well as the author of the book ”Manufacturing Cost Policy Deployment (MCPD) Transformation: Uncovering Hidden Reserves of Profitability”, published at Productivity Press din New York (USA), February 2018.

Alin Posteucă has more than 20 years of experience in Cost Improvement consulting and training. He has a PhD degree in Industrial Engineering and a PhD degree in Economics.