Capacity management carries out various functions as a part of its operation: dividing task into functional categories, which affects sales performance significantly over time.
Most companies produce saleable products, and to do so, there are various functions that must occur: marketing, accounting, administration to manage employees, business, and operations. Capacity management oversees and produces the products that are marketed, accounted for, that the employees are needed for, and is, essentially, the raison d'etre of the business. Capacity management assures that the resources such as tools, man power, inventory, facilities, etc. are available to produce quality products or services.
Efficient long-term capacity management is vital to any business. The cost, delivery speed, dependability and flexibility of production uniquely determines, and is relative to long-term changes in demand levels. Long-term planning of production levels in relation to sales creates a functional framework of production planning, control, and sales performance. This includes resource planning to determine the appropriate capacity levels that will support the production plan and the projected sales performance. Manufacturing strategy and sales and operations planning are the primary drivers of business success.
Simply put, capacity management produces the tangible products and/or services that determine sales performance. If these products and services are of poor quality, consistency, or availability, the performance of sales suffers, which affects the entire business. Without capacity management, sales would ultimately not exist, nor would the business.
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