The Case for Capacity Management
Ultimately, we are all focused on The Goal; making money. The key question is, are we focusing on the right things to ensure we’re making money? I’d like to argue that, by and large, we are not. To manage money, we should model it, so we can see what is coming into and leaving the company, and how that affects how much money we have at any given moment. One of the most influential reasons money leaves an organization is paying for capacity it has purchased. Recall, capacity is what you buy in anticipation of demand or use. This includes space, labor, materials, equipment, and technology.
Capacity, then, should be the at the center of practically all financial and operational analyses. Whether you’re ...
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