The finest product or service with the largest potential market is still not viable without production capacity. Your planning should start with a candid assessment of current production capabilities. What strengths, weaknesses, opportunities, or threats regarding production and facilities were revealed? Perhaps your present facility is inadequate to meet current demand. Perhaps it is underutilized. Are your production personnel able to meet quality and quantity standards, or will better-trained or more skilled personnel be necessary? Can they produce your modified or new products or services? Production and facility planning starts with your current assessment and then solves problems or projects future needs.
Service providers may or may not need brick-and-mortar production facilities. Training companies need to be able to print training manuals. Web-hosting companies need special facilities to maintain and store servers. Construction companies need a place to warehouse supplies and materials. In addition to these physical production facilities, some service providers should consider whether they have the human-capital infrastructure to produce intellectual capital. Consulting firms often need the capacity to generate ideas and procedures requiring intensive labor effort and skills and special facilities like meeting rooms or project-team space.
Whether you’re a product or service firm, consider benchmarking your production process against your industry-leading competitors when designing or renovating your production processes. Look at competitors’ production processes and evaluate your company’s performance on these factors:
- Production capacity
- Absence of errors or reworks
- On-time processes and delivery
- Inventory reduction
- Cost reduction
- Other criteria relevant to the product or service
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