International Operational and Logistical Strategies

For airlines, this may be in the form of the number of seats in its aircraft. for hotels, this would be the number of rooms available for occupancy. for retailers, capacity is denoted by the amount of floor space. and for manufacturers, this is the expected operating output of their machinery – or where several machines are operated in a product line, the output of that line. Even these refinements are insufficient in describing capacity in a way that would be meaningful or useful in management decision making. Many other factors influence capacity. For hotels, this would be the number of persons in each room, for manufacturers the availability of qualified machine operators and raw materials. for airlines the number of pilots, length of trips and turnaround time between flights, and for retailers the accessibility of its location to the customers (Barnes, 2008, p. 138).
Having an understanding of capacity, the next step is to try to define capacity management. According to Grummitt (2009, p. 23), capacity management is defined by its primary objective, which is to serve the needs of the business by ensuring that the organization understands and tracks demand and can maintain required service levels under both normal and contingency conditions both now and in the future within agreed cost constraints. Simply stated, capacity management ensures that the firm possesses the right amount and type of resources available where and when needed to meet demand as it materializes, and thereby attains the target performance level of the business.
Since the year 2000, Toyota and other car manufacturing companies have been aware that there is an excessive global capacity in the manufacture of automobiles. added to this is the need to reduce costs and increase efficiency. Toyota’s capacity management strategy is to enhance productionnbsp.efficiency by increasing the number of automobiles that are produced using common vehicle platforms and by sharing research and development expenses for environmental and other technology.