Capacity Management Strategies
Scenario: The Summer Peak Season at Beachfront Resort
At the luxurious Beachfront Resort, the summer season is approaching, bringing with it a surge
in demand from tourists seeking sun, sand, and relaxation. As the general manager, Maria faces
the challenge of effectively managing capacity during this peak period to ensure guest
satisfaction while maximizing revenue.
Maria observes historical data and market trends, noting that demand tends to spike during
weekends and holidays. She instructs the reservations team to monitor booking patterns closely
and adjust room rates dynamically based on demand fluctuations. During busy periods, they
remove all promotions to suppress demand. Maria also coordinates with the housekeeping and
maintenance team to ensure that staffing levels are flexible enough to accommodate sudden
increases in occupancy without compromising service quality. On rare occasions, agency staff
are brought in to assist. Also, the drinks and food provision are usually adjusted accordingly.
Recognizing the importance of maintaining a consistent level of occupancy throughout the
week, Maria implements capacity management strategies to encourage bookings during offpeak periods. She introduces mid-week promotions and packages targeting business travellers
and local residents looking for weekday getaways. Additionally, Maria collaborates with
marketing teams to launch targeted campaigns highlighting the resort’s amenities and activities
available during quieter periods. Maria aims to optimize resource utilization and enhance the
overall guest experience while reducing the strain on facilities and staff during peak times.
Maria implements a range of initiatives to balance guest expectations with available resources.
She establishes reservation quotas for each room category to ensure equitable distribution of
inventory among different guest segments. She leverages technology to monitor real-time
occupancy levels to ensure that facilitates such as the gym, spa and swimming pool are not
overly crowded. Similar, applies to the conference room. Maria aims to optimize revenue
generation while maintaining service excellence and guest satisfaction throughout the summer
season.
Through the strategic application of chase demand, level demand, and manage demand
capacity strategies, Maria successfully navigates the challenges of peak season operations at
Beachfront Resort, ensuring a seamless guest experience while maximizing profitability.
Question
Identify the capacity management strategies have been applied in managing Beachfront
Resort’s operations.
Process Improvement
Scenario: Manufacturing Plant Optimization Project
At Bright Manufacturing, a company specializing in producing solar panels, the management team
embarks on a Lean transformation project to enhance efficiency and reduce waste across their
operations. Led by the operations manager, Sarah, the team identifies various areas where waste is
present and develops strategies to eliminate them.
The production line at Bright Manufacturing often has high inventory due to inaccurate demand
forecasts and inefficient scheduling. Excess solar panels pile up in the warehouse, tying up valuable
resources and increasing storage costs. This also increases the risk of obsolescence and damage.
Workers on the assembly line, also frequently encounter waiting times between production steps due to
equipment breakdowns or material shortages. These delays lead to idle time and decreased productivity.
Usually, such workers tend to move between different workstations to complete tasks, such as reaching
for tools or bending to access materials. These inefficient movements contribute to fatigue and
ergonomic issues while reducing overall efficiency. Raw materials and finished goods are also
transported between different sections of the manufacturing facility using inefficient routes contributing
to the high lead times and increased risk of damage to products.
In addition to these challenges, certain production steps involve excessive processing or unnecessary
quality checks, leading to wasted time and resources. For example, some solar panels undergo multiple
inspections, even though previous checks have already confirmed their quality. Defective solar panels
also occasionally make their way through the production process, leading to rework or scrap. This
usually stems from equipment malfunctions, human error, or inadequate quality control measures.
Lastly, several skilled workers at Bright Manufacturing are underutilized, either due to insufficient
training or ineffective deployment. Their expertise and knowledge could be leveraged to optimize
processes and drive continuous improvement initiatives. To address these issues, Sarah and her team
implement Lean principles such as Just-in-Time manufacturing and Continuous Improvement. By
identifying and eliminating the eight types of waste, Bright Manufacturing aims to streamline
operations, improve product quality, and increase profitability.
Please identify the type of wastes in the manufacturing operations and discuss what you
would do to mitigate them.
Please do not move to the next page until you have attempted this.
Answers
Capacity Management Strategies
Chase demand
• Staffing levels made flexible enough to accommodate sudden increase.
• Use of agency staff on rare occasions
• Adjustment of drinks and food provision.
Manage demand.
• Room rates adjusted dynamically based on fluctuations.
• Removal of promotions during busy times.
• Encouragement of bookings during off-peak periods, i.e., mid-week promotions and
packages for targeted group.
• Enhance overall guest experience.
Level capacity.
• Leverages technology to ensure there are enough guests using the hotel’s fixed
resources, i.e., gym, spa, swimming pool.
• Equitable distribution of inventory.
• Include general things; beds, rooms, operational times- 27/4.
Process Improvement
Overproduction:
The production line at Bright Manufacturing often experiences overproduction due to
inaccurate demand forecasts and inefficient scheduling. Excess solar panels pile up in the
warehouse, tying up valuable resources and increasing storage costs.
Waiting:
Workers on the assembly line frequently encounter waiting times between production steps due
to equipment breakdowns or material shortages. These delays lead to idle time and decreased
productivity.
Transportation:
Raw materials and finished goods are transported between different sections of the
manufacturing facility using inefficient routes, resulting in unnecessary movement and
handling. This transportation waste adds to lead times and increases the risk of damage to
products.
Inventory:
The warehouse at Bright Manufacturing is filled with excess inventory, including surplus raw
materials and finished goods. This overstocking ties up capital and warehouse space while
increasing the risk of obsolescence and damage.
Motion:
Operators on the assembly line often perform unnecessary movements and motions while
completing tasks, such as reaching for tools or bending to access materials. These inefficient
movements contribute to fatigue and ergonomic issues while reducing overall efficiency.
Overprocessing:
Certain production steps involve excessive processing or unnecessary quality checks, leading
to wasted time and resources. For example, some solar panels undergo multiple inspections,
even though previous checks have already confirmed their quality.
Defects:
Defective solar panels occasionally make their way through the production process, leading to
rework or scrap. These defects result from equipment malfunctions, human error, or inadequate
quality control measures.
Underutilization of Talent:
Several skilled workers at Bright Manufacturing are underutilized, either due to insufficient
training or ineffective deployment. Their expertise and knowledge could be leveraged to
optimize processes and drive continuous improvement initiatives.
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