Sometimes upside opportunities can be planned for, and sometimes they present themselves out of the blue. This article details how exploiting opportunities can be achieved. Examples of upside opportunities include an influx of orders, a favorable upturn in market prices, an opportunity to launch a new product, and so on.
An option to purchase gives you the right but not the obligation to purchase. This is analogous to a call option on a stock. The option is generally acquired in exchange for consideration known as the option premium.
Examples: real estate and aircraft.
Overbuild or shell design
Need to increase production capacity. Overbuild is building in extra, unused capacity. Shell design is a similar concept except that is generally involves less investment.
Example of overbuild: Acquire production equipment with greater capacity than is currently needed.
Examples of shell design: Build extra floor space to allow for future expansion. Buy extra land for future expansion.
Insource and/or outsource
Design product to be built in-house and/or by third party. Expand production by using both in-house and third party production as needed. Also consider multiple suppliers to increase capacity.
Around the clock
Add a second or third shift to increase production.
Allows for additional features and options that can be added later to adapt product to market, improve product, increase market served, and customization to customer’s needs. Also allows product to be adapted to other markets beyond the original. Also applies to production systems as well.
Modular design can also be used for future proofing. New modules that aren’t envisioned today can be added to extend useful life. This is especially important for long life products or production systems.