Tuesday, May 1, 2018

Production capacity

Today’s business environment is dominated by change and uncertainty, and global competition is diminishing defined markets. Meeting customer demands require a high degree of flexibility, low-cost/low-volume manufacturing skills, and short delivery times.

Production capacity defines a volume of products that can be generated by a production plant or enterprise in a given period by using current resources.

For various reasons, the level of production capacity fluctuates even on a daily basis. It can be due to random employee absences, unexpected breakdown of machinery and equipment or problems that may arise with the supply of materials, media and components.

Dynamics of the company’s production capacity reflects not only the usage and replacement of the production means, but also improvement of technology and production organization. Therefore, production capacity depends not only on specific factors used in the production process, such as operating resources, objects of labor and manpower, but also on technical and organizational progress.

The production capacity of the industry can be expanded through the importation of production facilities to meet the short-term needs of a country, but experience has shown that more often than not such measures lead to a continuing dependence on imported factors inputs with little increase in domestic technological capacity.
Production capacity
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