Business Environment and Organization - Essay Example

Capacity levels and policies of a company should be adjusted due to external and internal forces like competitors. The company should be more flexible to react to changes in price pressure and raw material availability. Capacity changes depending on the company whether it is a workstation’s ability to process jobs or a manufacturing plant (Grummitt, 89). The dynamic nature of capacity and interrelationship among different supply chain elements bring about change of capacity in an organization.

Improvement of engineering pieces of equipment, labor availability, improvement of process and new data management helps in changing the capacity of supply. In a competitive business, there should be the ability to react while making informed and educated decisions. This will help in making the organization a success and healthy (Grummitt, 113). Capacity persistence enables organizations to rise above their competitor basing on the supply chain, service provision, and flexibility. Business with extreme seasonality should look for alternatives, to help in times of low supply and high demand.

The organization can build an inventory, in house capacity and outsourced capacity (Grummitt, 128). Capacity management has a huge impact on supply and production level in an organization. Organizations should understand their customers demand and adjust their production to meet their demands.