Capacity management is the process of balancing efficiency and customer satisfaction in a business operation. It can refer to the overall function of a business or specific areas, such as IT or production. It is necessary for companies to remain competitive and maintain customer loyalty.
Capacity management is a process or method designed to identify and maintain the optimal balance between the efficiency of a business operation and the satisfaction that customers receive from the goods and services offered by those businesses. The objective is to operate the business at the optimum level of capacity, both in terms of operating efficiency and the profits made in producing each unit, as well as taking steps to win and maintain long-term loyal and satisfied customers. Capacity management can refer to the overall function of the business or focus on specific areas of the operation, such as the quality and performance of information technology efforts across the enterprise.
When referring to IT functions, capacity management is a process used to manage information technology functions in order to achieve various objectives. First, network performance management is maintained at a capacity level that makes internal data sharing and communications as efficient as possible, given the limitations of current hardware and software applications in the enterprise fabric. At the same time, this type of IT capacity management will also look at how the network works in terms of providing customer service and support when and when needed. This could include building autoresponder functions into the email schedule that automatically route a confirmation email to any customer who submits an inquiry via this medium. IT professionals can also take steps to implement scheduling that helps minimize wait times when a customer calls the customer service center with a question or concern.
The same general principle of capacity management can be employed in other parts of the business operation as well. A company might redo the production floor where goods are manufactured in an effort to increase the number of units produced each hour. When assessing the impact of the redesigned production floor, the company will also ensure that the changes do not adversely affect the quality of the units produced. As a result, the production capacity of the floor is increased, while the customer satisfaction capacity remains at the same high level.
Capacity management is a necessary task for any company that wants to remain competitive in the marketplace. Without taking steps to conduct a performance review on various components of the business, as well as the business as a whole, there is no chance of getting involved in the task of performance tuning. A company that does not constantly assess whether or not it is operating at optimal capacity will eventually lose customers to competitors and will not be able to make up for those losses with new customers.
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