Balancing Demand in Service Operations


This helps service companies to gain a competitive edge over others in the market as if there is anything that makes a customer move on to your competitor, then it is poor and slow service, having to wait in queue, and being disappointed at not getting served.  For efficient, effective, and economical operation of services of an organization, it is essential to integrate the demand management and productive capacity planning system. Managing demand and productive capacity planning follow adaption of service features and finalization of a price strategy, resource planning during changes in demand.

Managing demand and productive capacity planning addresses a fundamental problem of low service throughput, inventory management, and resource utilization. Managing demand and productive capacity planning are essential for customer delight and overall success of a service organization. Productive Capacity Planning is required for service delivery, quality management, inventory management, resource management, and equipment management. Productive Capacity Planning ensures that service team can meet the required demand levels through optimum utilization of resources, quality management, and cost savings.

Services may require more than one step to be delivered to the customers. Also, many times, this sequential delivery places a constraint on the service provider’s capacity to deliver services to multiple consumers who may arrive at once. It is obvious that the profitability of a service company depends upon its productive capacity or the number of consumers it can serve. Thus, it is crucial that’s service companies should learn to manage elements of its productive capacity such as its physical facilities, equipment, personnel, or the number of services provided in order to fulfil the demand.

People learn more from their failures than from their success. Hence, one of the best approaches to avoid copying best practices of productive capacity planning is to create a process involving frank discussion about worst practices.

This will help create very effective productive capacity planning strategies because people debate on the merits of different examples of good practice, scout the organizations for promising practices that may already be bubbling up and then develop a view of what next practice should be.

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