Question

How does capacity planning differ in service and manufacturing organizations? Please offer at least one specific example to support your viewpoint.

Answer 1

Capacity planning is a process of assessing the capability of an organization in terms of production and other related functions at a given point of time. In the same way, services business also plans its capacity to serve the customers. But the process differ due to the following reasons,

1) Business model will be different

2) Marketing mix elements will also be differently designed and explained

3) Manufacturing organizations have requirements of raw materials which will be different incase of services business

4) Services business need not worry about having perishable goods or having increased shelf life of products like manufacturing organizations.

5) Inventory cost will be more important for manufacturers rather services providers .

For Example,

Due to Covid19, Supply chain has been disturbed hence most of the manufacturing organizations face challenges of inputs to production. They will not able to deliver its promised orders. But , telcom services are running.