Ability of a service system to deliver the intended service and to match customer demand. Service capacity is perishable and can be intangible. Service capacity cannot be inventoried & hence cannot be transferred from one customer to other. We cannot prepare the service package in advance to deliver it at the later point of time.
Service capacity has to be managed in a highly dynamic environment where service organizations face more personalized demand due to the presence of customer than in manufacturing sector. Meeting personalized demand directly affects the service quality perceived by the customer.
Capacity of a service is also attributed to the highest possible amount of output that may be obtained in a specified period of time with a predefined level of staff, installations and equipment (Lovelock, 1992). Managing capacity can be viewed as minimizing waiting time while avoiding idle capacity to meet the demand in the most efficient way.
Elements of Service Capacity
Capacity of service organization effectively and to provide a good quality service. Many strategies can be proposed to manage capacity in services if some organization understands the importance of all the elements presented. Altering human resources can be good capacity management strategy provided what kind of demand an organization is targeting to meet, whether demand is seasonal or cyclical. Are there any opportunities to automate the service where customers can utilize the technology from anywhere by avoiding personal visits to the service organizations. It is equally important to understand the knowledge level of customer. For example the internet penetration in India especially in rural India is very low. So, providing service through online mode may not help in such situations. The number of facilities, their locations and the possible considerations of facility expansion helps in managing the demand fluctuations.