demandcapacity as well as utilizations by resource types as shown in Exhibit 3

Demandcapacity as well as utilizations by resource

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(demand/capacity) as well as utilizations by resource types, as shown in Exhibit 3-9. Where utilization exceeds 100 percent, there are not sufficient resources to execute all of the projects in the plan on schedule. In fact, to allow for contingencies and to enable re- sponsiveness, planned capacity utilization may be below 100 percent. In the aggregate planning process, an organization may find that it is in danger of over- committing resources (often by as much as 100 percent or more, according to Wheelwright and Clark, 1992). Therefore the organization must decide in the planning stage which projects are most important to the success of the firm, and pursue those with adequate re- sources. Other projects may need to be eliminated from the plan or shifted in time. Project Timing Determining the timing and sequence of projects, sometimes called pipeline management, must consider a number of factors, including: Timing of product introductions: Generally the sooner a product is brought to market the better. However, launching a product before it is of adequate quality can damage the reputation of the firm. Technology readiness: The robustness of the underlying technologies plays a critical role in the planning process. A proven, robust technology can be integrated into prod- ucts much more quickly and reliably. • Market readiness: The sequence of product introductions determines whether early adopters buy the low-end product and may trade up or whether they buy the high-end product offered at a high initial price. Releasing improvements too quickly can frus- trate customers who want to keep up; on the other hand, releasing new products too slowly risks lagging behind competitors. Competition: The anticipated release of competing products may accelerate the timing of development projects. -rhe Product Plan The set of projects approved by the planning process, sequenced in time, becomes the product plan, as shown earlier in Exhibit 3-2. The plan may include a mix of fundamen- tally new products, platform projects, and derivative projects of varying size. Product plans are updated on a periodic basis, perhaps quarterly or annually, as part of the firm's strategic planning activity. Step 4: Complete Pre-Project Planning Once the project has been approved, but before substantial resources are applied, a pre- project planning activity takes place. This activity involves a small, cross-functional team of people, often known as the core team. The Lakes core team consisted of approximately 30 people representing a wide range of technical expertise, marketing, manufacturing, and service functions.
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~ Q {3 !$: w .cO) n.S ~.5 ~ ~ ~·tii Q) en (tI Ol :2c3 w~ ~Ji t5Li: tlo) "" - "0'" Ec3 ~akes Project 155 160 105 75 7 6010 Project 30 25 10 5 i 595 Project Astra Project 60 24 25 55 60 44 25 2 300 269 184 log- 10 250 250 200 100 8 Resource Demand Resource Capacity Year 1 Year 2 Year 3 0) 0) OJ c C I r 0) "C; Cl 0) ";:;: 0) OJ ";:;: 0) 0; I - 4 J C "c C '" c I '" _.§ ",C -';: u '0'1: Qj~ 0; t)"= (0' ~ ] m'~ o·~ ~ ~ co ",Ol "'Ill 0", '" Q) 'c roC .~(() ~<D m CO ';:;: c: '" U., III -Ol ~'" "Sc 11 c C ,+-Ol «; ~ !::; c: 'iii co i: 0) Q) CI ..::'-' UJ UJ "::U-J V) U.
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