Ford Plant

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Ford Plant: Capacity Decision Elements
The first example of capacity decision element of the impact it has on the operating costs. An appropriate capacity planning decision can make the manufacturing assembly more efficient and effective, thereby reducing the operating expenses. When the equipment, raw materials, labor, and storage or warehouse requirements are balanced with the view of meeting the demand for the products, the operating costs will easily be controlled and optimized. Another element of capacity decision is the long-term commitment of resources. Ford plant displays a constant commitment to the resources available for the production processes. A good capacity decision involves a permanent and long-lasting devotion of resources such as labor and machinery in the production activities. A company should ensure that all the scarce resources are utilized appropriately to achieve the optimal production level.
What is more, another element of capacity decision that stands out in the video is that it should be planned for in advance as they consume financial and other resources. An organization needs to arrange all the required materials, resources, expertise, and work teams early enough to plan for the capacity. The capacity decision involves complex judgments that need time to be concluded and implemented. Globalization also contributes to the complexity of the capacity decision because the supply and procurement of the raw materials and parts include many countries across the globe operating within an integrated supply chain network.

The decisions made, and the requirements consume a significant level of resources, including finance, in the firm. Hence, for proper and viable decisions, the planning process should be done in advance. Ultimately, the other apparent element of capacity decision in the video is competitiveness. A proper capacity decision can influence the competitiveness of the company. Optimal production level via proper capacity planning decision avoids excess production, resulting in the prevention of wastes and unnecessary costs and efficiency.