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d capacity or they would lose sales this could come from poor quality of work from being rushed to compete work.

A Capacity Shortage Policy is when there is a gap between the demand and the capacity where demand is always higher than capacity. As there is a high capacity utilisation this means there is a strong return on investment. This type of policy is usually best for goods or services that usually relate to status or are in fashion. This would mean that there is a high capacity utilisation which in turn leads to a strong return on investment. For example the iPhone 4 White. When it came out it was being sold quicker than it was being made.

The way that Kier Group plc plan their capacity is by a strategy called Excess Capacity Policy (Fry, Colin. 2014). This policy means that the business has a goal of maintaining enough capacity to be able to meet with demand or to reduce the chance of not meeting demand. Although this policy can lead to higher costs than the other two polices it is the best policy for this business. This is because the business does not know if they are going to win a bid for a client so there needs to be spare capacity in case they do win the bid. As large construction businesses get invited to present their bid on large projects so the business always need to be prepared for these invites.

Kier Group plc could better utilise operations management to counter some of the challenges that it has in the ever changing market place. It could utilise Lean Operations more this is because there is going to be more legislation regarding reducing waste and carbon footprint. It’s better to be proactive to changes in legislation than to be reactive as it shows the business has a strong CSR which customers and clients look for.

Lean Operations is minimising the amount of waste there is in order to operate quicker, produce higher quality work and also to operate at low costs. The reason that lean operation is suited for Kier Group plc is because in the lean approach there is a focus on producing only when there is a need to produce, this does mean there is a lower capacity utilisation however this fits in well with the Excess Capacity Policy has the business already is implementing.

Some of the techniques that could be used in lean operations for the business could be JIT supply and Total Involvement. JIT supply means just in time supply. This means that you wouldn’t receive materials until you need those materials (Hill, T. 1987). This would be useful in the business because it means there wouldn’t been material they don’t need wasting space in a construction site. For example the wouldn’t need a road tarmaer when the drainage is still 3 days away from being completed not only could it be wasting space it could be in the way of workers increasing the distance from the materials they’re using to the place where they need to use them. If 10 workers had to go an extra 20 seconds out of their way whilst this tarmacer was 3 days early and each worker had to do this trip 40 times a day that adds an extra 400 minutes on their travel overall on the 3 days the tarmacer was there. With JIT supply the tarmacer would arrive on the day it was needed saving the 400 minutes which could have been wasted.

Total involvement is when everyone within the business is aware of the lean approach of the business. If everyone is doing it, it would become second nature to ab