Managing capacity in a service environment

Abstract

The study of capacity in a service environment was used to provide a recommendation to a health risk management company who is currently unable to cope with capacity constraints within the organisation. The project objective is to develop a manner to address capacity in a service environment where both range and response flexibility is necessary. Furthermore, the project aims to provide a recommendation to address the capacity constraints in an organisation that must process all demand. In the case of the health risk management company, the company should create sufficient capacity to process all applications within the agreed to service level agreement. The main theories used to address the problem were Capacity Management, Theory of Constraints, Queuing Theory and Simulation Modelling. Although the study investigates a service environment, to apply principles of Theory of Constraints and the drum-buffer-rope methodology, applications need to be visualised as work in process, much as they would in a manufacturing environment. The type of problem studied through the health risk management company is not restricted to a service environment but can be used in organisations where all demand must be met and where the bottleneck in the system is not easily determined in terms of capacity.