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What Does "Ramp up" Mean?

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  • Written By: Mary McMahon
  • Edited By: Nancy Fann-Im
  • Last Modified Date: 20 August 2016
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Ramp up is a slang term in the business community that refers to slowly increasing production and capacity to accommodate an anticipated rise in demand. This is often part of the overall business plan for a company, and companies can also adopt a ramp up strategy in response to changing market conditions. This requires a steady infusion of cash and energy to meet the demand without stalling out. If the business runs into problems partway through the process, they can create a significant snarl in operations.

This term refers to the idea of gently climbing the incline of a ramp, rather than stepping or jumping up. In a ramp up operation, a business will slowly add components over time. The slow rate of growth provides room for adjustment. This can leave a margin for error; if a company finds that it needs to adjust its practices, for example, it doesn't have to halt production to adjust the problem. It may be necessary to temporarily roll back operations, but they won't be brought to a full stop.

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Companies typically ramp up as part of a strategy to increase demand for their products and to make sure goods will be available to fill orders. An example can be seen in retail where manufacturers start to increase production of goods as catalogs and representatives start to hit retailers. As stores order, the company will be able to send out the products it has already made, and it should hit production peak at around the same time the peak number of orders come in from retailers.

This can be a useful growth strategy for a business. Ramping up operations carries fewer risks and the need for sudden investment of large amounts of money tends to be lower. Ideally, the funds generated from higher production feed back into the company and pay the costs associated with an increase capacity. Companies can point to their track record when soliciting loans or investments from venture capitalists and other interested parties. Their steady growth rate may be evidence that they have the capacity to keep growing over time.

Personnel at a business with a ramp up strategy will have to periodically adjust their efforts to meet new needs. As the company hits specific targets, it may increase pay, add staff, upgrade equipment, and take other steps to support the staff so they can continue to serve the company as efficiently as possible. A common issue with ramping up production can be a speed of production that outpaces capacity of staff, equipment, or facilities, creating snags until these issues can be resolved. Foreseeing trouble spots and taking steps to address them can increase overall efficiency.

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