Flexible Capacity

Goals

To gain a more complete understanding of how different industries economically value flexibility (the ability to quickly add and remove capacity) to an overall system.

Early Findings

Capacity flexibility means having the ability to rapidly increase or decrease production levels or to shift production capacity quickly from one product or service to another.

Industries Actively Valuing Flexible Capacity

Information Technology (IT)
  • Traditional enterprise computing models, financial, healthcare, and other kinds of businesses often need to grapple with costly procurement cycles and heavy capital expenditures. The result can often be over provisioning—paying for capacity well before it’s used.
  • In a pay-as-you-grow model, customers work with their technology provider to determine what their computing capacity needs are today and in the future. That capacity for current demands is installed along with additional capacity for growth.
  • Many enterprise IT providers are shifting to a flexible consumption or everything-as-a-service (XaaS) model.
Airlines
  • The ability to effectively match supply and demand under uncertainty can result in significant revenue benefits in the airline industry.
  • A Demand Driven Swapping (DDS) approach that takes advantage of the flexibilities in the system and dynamically swaps aircraft as departures near and more accurate demand information is obtained.
Data Storage
  • DataCore has developed a flexible storage infrastructure, designed to accelerate the adoption of software-defined storage (SDS) in enterprise data centers, the cloud and edge computing; centralizing command and control of different classes of storage spanning primary, secondary and archive. The company also announced the availability of a number of components that help make this vision a reality, including a flexible hyperconverged infrastructure (HCI) appliance, subscription-based licensing, a new cloud-based analytics service, and a number of enhancements to its already powerful software-defined storage technology.

Calculation for Valuing Flexible Capacity

Proposed next steps:

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Early findings indicate that the project should continue to further investigate 1) defining of economic terms related to flexibility in plain English; 2) industries who utilize flexible capacity; 3) insights into how economic value is measured; and 4) examples of models and/or heuristics flexible capacity can optimize a supply chain, power grid, or other industry use.