Case type 13
Capacity, supply chain, and footprint
Can we make and move enough: comparing demand with capacity along the chain, fixing the link that limits it at the lowest cost, and choosing where to place capacity.
17 min1 lesson Last reviewed
Start the lesson Capacity, supply chain, and footprint
How do you approach a capacity or supply chain case?
- Compare demand with capacity at each stage of the chain, find the stage that limits output, and decide whether to add, move or buy capacity there.
- The most common mistake: adding capacity where there is already spare capacity instead of at the stage that limits output.
- Compare each link's capacity with demand and lead with the one that limits the chain, rather than assuming the factory is the limit because it is the most visible.
By the end you will be able to
- Compare demand with capacity at each link
- Find the link that limits the chain
- Compare fixes on cost, and choose a location on cost to serve