Business Brief
Introduction
Franklin Fan Company, the maker of the electric fan, was established by engineers Dan Block and Ed Spriggs. The company was started in Dan Block’s garage and displayed slow but steady growth for seven years. It was during this time that Mr. Block and Mr. Spriggs decided to move the business to an old meat-packing warehouse located on Chicago’s South Side. The availability of space for the storage of inventory, the company began to produce additional lines of fans; growing the business. 15 years later, the company has once again relocated to a brand new warehouse and became the largest independent maker of fans in the north central area. The new storage space is more than 100,000 square feet. The additional space has increased capacity from 65% to 90%, but sales growth has not progressed (Krajewski, Malhotra, Ritzman, n.d).
Analysis
Capacity is the maximum level of output that a company can sustain to make a product or provide a service over period of time (investopedia.com, n.d). Capacity planning is essential to be determining optimum utilization of resource and plays an important role decision-making process, for example, extension of existing operations, modification to product lines, starting new products, etc. Planning ensures that operating cost are maintained at a minimum possible level without affecting the quality. It ensures the organization remain competitive and can achieve the long-term growth plan. The ultimate goal of capacity planning is to meet the current and future level of the requirement at a minimal wastage (MSG, n.d).
Manufacturing capacity is increased either to meet an immediate increase in customer demand or to meet a future increase in consumer demand. An immediate capacity increase is obtained by using equipment that is already on hand for more time through the use of additional shifts or overtime; or, outsourcing the work. Future capacity increases are attained using the current equipment more efficiently or buying new equipment. Franklin Fan Company seeks to grow its business units. Its objective is to gain growth in the fan market and obtain more market share. Franklin's desire of growth has to be strong because the greater the market size, the greater the profit (Krajewski, Malhotra, Ritzman, n.d).
Anyhow, the increase in manufacturing capacity results in increased costs, more significant complications, and need for skillful management. On the other hand, inadequate production capacity can result in turning down orders which could lead to customer dissatisfaction. Deficient capacity could also result in over usage of existing equipment and labor. Franklin Fan Company should be able to integrate business, growth and capacity planning for long term existence (Krajewski, Malhotra, Ritzman, n.d).
Recommendation
A manager can maintain a high level of capacity by avoiding bottlenecks in the production process. A bottleneck is a point of congestion that slows the process. Any event that stops production increases costs and may delay a shipment of goods to a customer. Delays may mean the loss of a customer order and possibly the loss of future business from the client. Management can avoid bottlenecks by working with reliable vendors and properly training employees (MSG, n.d). If the production of the CF151 and PF302 fans are standardized, then a Franklin Fan company should manufacture the fans to be stocked at times of low demand to offset manufacturing capacity requirements in times of high demand. This exact idea should also be utilized if the standardization is up to a particular level of production for the fans. With the help of standardization, Franklin Fan Company can offset capacity requirements during periods of high demand by building inventory in times of weak demand.
My Requirements:
Only paraphrase the Business Brief without cut any sentence or idea. Make sure while paraphrasing, the phrases and the sentences should be clear, good grammar, strong and not poor writing like the previous week. Keep the citation within a text as it is. Also, I don’t want references at all and no cover page.
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