In the corporate world, capability refers to a company's ability to either generate production or succeed, while profitability refers to a company's long-term longevity as well as its ability to maintain income.
Capacity is regarded as a long-term concept; hence, it refers to a company's ability to support its output production for an extended period of time (Dosch, 2).
Capacity Management
Capacity control is the management of a company's resource boundaries, which may include the workforce, raw materials, technology and facilities, inventory, and production (Dosch, 2).
Presence of capacity constraints in any of the firm’s resources or rather processes can be a major bottleneck for the business; therefore, capacity management is essential in ensuring the business operates smoothly, hence, its survival. Since businesses do not just exist in real time, the primary role of capacity management is to ensure that the business’s current as well as future capacity. Managing capacity is essential as it increases a company’s performance, its stability and adaptability (Dosch, 5). Furthermore, the presence of improper or rather inadequate capacity management can affect a company’s financial performance thereby, impeding its business prospects and ultimately its survival; hence, its future.
For example in the event of a fall in demand for a company’s products, both equipment’s and laborers can become idle. Therefore, there is need for capacity management which entails laying off some employees, selling of equipment as well as closing some plants to avoid financial losses which could lead to failure of the business.
Productive and Non-productive Time
In conclusion, productive time can be described as time spent in the manufacturing of finished units which are sold to meet the demands of customers. Therefore, production of units is primarily driven by the level of customer demands (Dosch, 14).
On the other hand, non-productive time is time spent by employees in the workplace but not performing activities that are related or support the production of units to meet customer demands (Dosch, 15). Hence, unlike productive time, non-productive time is not directly associated with manufacturing operations. Examples of no-productive time include training, rework, breakdown maintenance, job scheduling, equipment set-up time and equipment maintenance (Dosch, 15).
Work Cited
Dosch, J. Managing Capacity for Long-Term Viability. Metropolitan State University (n.d). Pp. 1-19
