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Making Improvements When You’re Short of Capacity

When demand begins to exceed capacity, many companies move too quickly to outsource their excess demand or purchase new equipment. Often, these companies fail to consider the potential risks that these solutions bring with them. For example, when demand goes above a piece of equipment’s current capacity, it usually increases only in small increments. But a new piece of equipment may double capacity and leave you with excess capacity and excess costs. Moreover, if outsourcing in your industry is quick and without significant start-up costs or delays, it may seem a logical solution, but be aware that it does not always produce expected and desired results. Before being swayed by the potential ...

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