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Difference btw capacity and capability.

Someone asked on May 05, 2019 - 4 answers

Could please someone explain the two concepts? Thanks!

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Sidi updated his answer on May 06, 2019
McKinsey Engagement Manager & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 60+ candidates secure MBB offers

A simple and crystal clear way to distinguish:

  • Capability determines WHETHER a person or organization can offer a certain product or service.
  • Capacity determines HOW MUCH of this service or product can be offered within a defined time frame

Hence, capability ensures that you can get going, and capacity ensures that you can meet the demand that you face.

Cheers, Sidi

(edited)

Vlad replied on May 05, 2019
McKinsey / Accenture / Got all BIG3 offers / More than 300 real MBB cases / Harvard Business School

Hi,

Capability is a broad definition that refers to the differentiators the company can have:

  • Cheap suppliers
  • Intellectual property
  • Unique contracts with distributors
  • Economies of scale
  • Talent
  • Etc

Capacity usually refers to how much the company can produce. If the company has more capacity than anyone else on the market it's also a unique capability

Best

Daniel replied on May 05, 2019

Hi,

first, I wouldn't necessarily speak of concepts when relating to these words. These are just two words.

Capability means the ability to do something, for instance, "does company A have the capability to produce product B?" is synonymous with "does company A have the ability to produce product B?" In other words, "CAN company A produce product A?"

In contrast, capacity tells you about the maximum amount/extent something can do, contain, produce, etc., something. For instance, machine A can have a capacity of 2000 parts/min. So the outcome of having this machine producing parts is 2000 parts/min.

I hope this helps.

Regards,

Daniel

Guennael replied on May 06, 2019
Ex-MBB, Experienced Hire; I will teach you not only the how, but also the why of case interviews

Capability: I am even able to do it (knowledge)

Capacity: Do I have bandwith

These two are often used interchangeably.

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