How does aggregate planning in services differ from aggregate planning in manufacturing?
Aggregate planning is the process of matching the supply of and demand for a specific product or service through the determination of appropriate quantities, timing of the inputs, mode of transformation, and the outputs. It demands the formulation of the organization’s operational schedule to enable seamless operations. It supports decisions made concerning production processes, level of staffing, and inventory levels required to meet the respective demand and supply of the products and services. Operations managers in firms dealing with products and services should choose the best combination of options to ensure a match between the demand for and supply of products and services.
Aggregate planning in services differs from aggregate planning in manufacturing from diverse perspectives. To generate aggregate planning strategies, manufacturing firms focus on capacity options such as adjusting inventory levels, workforce size, and production rates (Heizner and Render 13). Contrariwise, service firms focus on demand management and, therefore, aggregate planning strategies consider a combination of both capacity and demand options such as service mixing. Furthermore, service sectors mainly focus on workforce schedules to develop aggregate planning schedules, while manufacturing firms focus on production plans. Aggregate planning approach considers services as perishable and underutilized opportunities, or space is considered wasteful.
In the process of generating aggregate planning strategies, operations managers have to evaluate the different alternatives to come up with the most appropriate strategy. In manufacturing firms, they will focus on production plans, which makes capacity options for further use. Contrariwise, in service firms, the focus will be made on workforce schedules, which leads to demand options also being of importance. As such, operations managers in service firms focus on alternatives that have combinations of capacity and demand options.
Works Cited
Heizner, Jay and Barry, Render. Operations Management 10th Edition. Prentice Hall, 2011.
