Situation: A Company has been growing rapidly over the past year. This has strained resources in some departments, including manufacturing. New customer demand just keeps coming in. What can the CEO do to meet customer demand without busting at the seams? How do you take on additional business when you are capacity limited?

Advice from the CEOs:

• There are three questions to be asked before taking other steps:
  • Is it possible to expand manufacturing by outsourcing?
  • Can the company just hire more people?
  • Is the business that the company is getting good profitable business?
• First, what a great problem to have – not to belittle the challenge that the company faces.
• If there is concern about the company’s vulnerability to future downturns and the company is holding off adding staff because of this, look for a filler product that can help the company to smooth business cycles.
• Farm out constrained work to other departments of the company – for example engineering. Are there independent entities that the company could partner with to add temporary capacity?
• If there are financial constraints, then look at adjusting the pricing for new business.
• If there are conflicts between capacity in manufacturing and engineering, consider becoming more of an engineering-focused firm and invest in this area. Look at outsourcing manufacturing capacity.
• Look for sources of temporary capital to fund the company through the adjustment. Use an existing bank line of credit or a loan to finance short-term capital needs.

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