Planning in Companies with Dispersed Capacity

This chapter’s objective is to discuss the effect of dispersed capacity on planning in manufacturing organisations. The chapter is based on case study research conducted by the authors in a company with geographically dispersed capacity. This is augmented by a questionnaire survey intended to show that the case study company is not unique. The information collected from the two previously mentioned sources is compared with literature. The questionnaire and literature indicated that there are now substantial numbers of companies with dispersed capacity. The case study research indicates that this leads to greater planning complexity because of increased lead-times due to transhipment. In contrast with single-site companies, this complexity cannot be addressed by Just-in-Time in cases where capacity is dispersed. In-depth research has been conducted in only one company, though the questionnaire survey provides supporting data. The chapter implies that companies employing dispersed capacity need to focus on improving their planning systems to cope with the increased complexity. While the literature on Supply Chain Management (SCM) is extensive, there has been relatively little case-based research on the implications of globalisation for planning. In particular, while it is widely believed that many companies have dispersed their capacity, the evidence for this is largely anecdotal. The survey presented in the chapter provides quantitative data to support this belief.

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