42 What are some of the important steps in capacity manageme

4.2

What are some of the important steps in capacity management and why is this important to supply chain management? What role does the Bill of Materials play in aiding capacity planning?

Solution

capacity management will helps us to minimize the risk at supply chain management process. Capacity issues can occur at the production, distribution or transportation node of the supply chain and often result in the business not being able to meet customer demand. The complicated and interconnected nature of a modern supply chain means that failure at any point on the chain can have ripple effects, also known as the bullwhip effect, along the entire chain. Adding to the complexity is the dynamic nature of capacity, which may constantly fluctuate due to the interrelationships among various supply chain elements.

by analysing the supplier capacity based on industry, nature of the material and nature of resource, he can choose any one technique to make the supply chain in a correct way.