Capacity Planning Strategies - A Comparison of Lead Lag Match and Adjustment

#capacity #capacityplanning #operationsmanagement
Capacity planning strategies involve the methods and approaches used to determine and manage the appropriate level of capacity within an organization to meet customer demand effectively. Here are some common capacity planning strategies:
Leading Strategy: This strategy involves proactively increasing capacity ahead of anticipated demand. It requires forecasting future demand accurately and making strategic investments in resources, such as equipment, facilities, and human resources, to meet that demand.
Lagging Strategy: This strategy involves increasing capacity only after demand has already exceeded current capacity. It allows organizations to avoid unnecessary investments and minimize the risk of overcapacity. However, it may result in temporary periods of high demand and potential customer dissatisfaction.
Matching Strategy: This strategy aims to align capacity with demand by adjusting resources in response to changing demand patterns. Organizations using this strategy maintain a balance between supply and demand by adjusting workforce, inventory levels, and production schedules in real-time.
Adjustment Strategy: This strategy aims to ALIGN capacity with demand through a system or process change in response to increases or decreases in demand. Organizations typically only use this strategy when customer demand warrants a system or process change.

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