Linking long-term capacity management for manufacturing and service operations

For firms that combine manufacturing and service operations in one system, the task of managing capacity is not straightforward. New goods and services may not have the same set of competitive priorities, and the models and concepts available in the literature for service operations differ from those for manufacturing operations. We address this problem and review the concepts and models for capacity management in the long term in both streams of literature, i.e. manufacturing and services, to develop a unified framework for manufacturing and service operations. The framework creates transparency between new goods manufacturing and service operations, since the same long-term capacity management structure is used for both product types, as well as between capacity strategy and planning strategy, since new goods and services are treated simultaneously. In the framework, the concepts of chase and level strategies are redefined for service operations to allow for integration with manufacturing operations. A case study demonstrates the usefulness of the integrated approach for long-term capacity management.