The week 2 of MIS 373 introduced some
topics of reliability, strategic capacity planning, and quality control in the
process of producing a product or service. Those concepts are all important for
companies to maintain competitiveness in today’s market. Especially, the topic
of strategic capacity planning was covered extensively in this week’s lectures. According to the lectures, strategic capacity planning helps to achieve a match between the long-term
supply capabilities and the predicted level of long-term demand for a company to
gain profit. Here, the instructor indicates that capacity decisions are
strategic because capacity decisions impact many crucial components of a
company. It could affect the ability of the organization to meet future
customer demands and operating costs, and finally it could impact the
competitiveness of the company.
After learning the importance of capacity
planning, I have found that this concept can be related to the current event in
the world. In the article titled “The
iPad Continues to Struggle, and a New iPhone Could Make It Worse” from businessweek.com,
the content emphasizes how important and meaningful a good capacity planning
is, and how it influences a company’s growing. According to this reading, Apple
is facing inventory issues of iPads. Apple
Chief Executive Tim Cook told investors that “IPad sales met our expectations,
but we realize they didn't meet many of yours”.
Tim Cook focused on the enterprise market
to sell iPads. Although Apple has a big proportion of that market, Apple isn"t
satisfied with how many businesses are adopting tablets. This problem is due to
the wrong capacity planning. They neglect the impact of smartphones. Many
people believe that smartphones have more powerful processors, and bigger screens make
them seem less necessary. Also, whenever Apple does release its new iPhones,
they will likely be both bigger and more powerful than the iPhone 5S.
The
improper capacity planning gets the company in trouble. The over-capacity
planning causes many inventory issues to Apple, which can dramatically increase
its operating costs. In today’s world, the business environment is changing all
the time. Companies should recognize those changes and make new capacity plans
adjust to those changes.
References:
(1) Srikar Velichety Eller MIS 373 Summer Session
2, 2014 slides, CH 5,
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