What type of operations and supply chain environment has mor

What type of operations and supply chain environment has more difficulty managing capacity— an environment supporting standardized products and services or one that supports customized products and services? Explain.

What kind of capacity strategy—lead, lag, or match—would be associated with supporting standardized products or services versus customized products and services?

Explain how the strategy matches the type of environment.

Solution

What type of operations and supply chain environment has more difficulty managing capacity— an environment supporting standardized products and services or one that supports customized products and services? Explain.

The type of operation that has a more difficult time managing capacities are the ones that support customized products because it would take more time to produce since they are producing by customer specifications. With standardized products they are using complementary goods and services, which are goods and services that can be produced or delivered using the same resources available to the firm, but whose seasonal demand patterns are out of phase with each other (Collier 200).

Example of standardized products would be automobiles because they are produced in a manufacturing setting and done in a production line.

Example of customized products would be furniture because you can get furniture made to your liking.

What kind of capacity strategy—lead, lag, or match—would be associated with supporting standardized     products or services versus customized products and services?

Explain how the strategy matches the type of environment.

In make to order (customize) business structure, it’s more difficult to manage capacity as the resources are limited and there are instances where new resources are allocated. It often makes business add new suppliers in the supply chain and the risk increases. On the other hand for business dealing in standardized products and service it’s easier to perform capacity management because customer is aware about the production limit and services offered by the business. In the case of standardized products and services, Lead capacity strategy will be best suited as it helps in gaining competitive edge over the competitors and helps in meeting the business demands. Though there is risk associated with Lead strategy, it’s best suited for standardized products. For customized products and services, Match strategy will be best fit for the environment as it allows adding capacity in small amounts that reduces the risk and allows to meet the customer’s requirements.

References:

Capacity Management. (n.d.).Investopedia. Retrieved March 23, 2014, from http://www.investopedia.com/terms/c/capacity-management.asp

Collier, David A., James Evans. OM, 3rd Edition. South-Western, 2015-02-18. VitalBook file.

Inventory Management. Retrieved from: https://sites.google.com/site/yizhang919/inventory-mana