Purpose - This paper fills the gap between defining and measuring the productive limits of a service or system, and the impact of various assumptions about the productive potential of the nature and informativeness of capacity cost management systems for the service industry. The authors focused on the various ways in which multi-dimensional limits (for example, time, space, volume and/ or value-creating ability) can be used to define productive capacity. Specifically, this research suggests that the limits used in establishing the capacity cost management system restricts the amount and nature of the information the system is capable of providing to management. Justification - Two reasons are identified for studying the impact of capacity measurements on service organisations. First, firms which make the best use of their resources can be expected to outperform their competitors. The second arises from the potential structuration effect of capacity metrics. Such an investigation makes capacity a visible, and hence an actionable, construct. Design/Methodology - To explore these issues, a combination of analytics and qualitative field research methodology was used. The measurement dimensions were developed by analysing the different reports, baseline measures, and metrics included in capacity models as suggested by the literature. These analytics were enriched with observations obtained from field research. Findings/Potential Benefits - Maximizing the value created within an organization starts with understanding the nature and capability of all the company's resources. The outcome is the identification of capacity systems specifically suited for service operations. Such a framework would allow the organisation to develop economies, to make visible, the drivers of waste and productivity arid to identify the primary assumptions and implications of capacity limits. This is supported by empirical evidence.
|Title of host publication||Critical Perspectives on Accounting|
|Subtitle of host publication||an international conference at Baruch College April 25-26, 2008|
|Place of Publication||New York|
|Publisher||City University of New York|
|Number of pages||29|
|Publication status||Published - 2008|
|Event||Critical Perspectives on Accounting Conference - New York|
Duration: 24 Apr 2008 → 28 Apr 2008
|Conference||Critical Perspectives on Accounting Conference|
|Period||24/04/08 → 28/04/08|
- capacity management
- capacity models
- service industry
McNair, C. J., Watts, T., & Baard, V. (2008). The Only limits are those we place upon ourselves: improving productive potential by exploring the productive limits in the service industry. In T. Tinker (Ed.), Critical Perspectives on Accounting: an international conference at Baruch College April 25-26, 2008 (pp. 1-29). New York: City University of New York.