Riordan Manufacturing strives to be the leader in using polymer materials to provide solutions to customer’s challenges. The main focus is to achieve and maintain reasonable profitability to assure that the financial and human capital is available for sustained growth. In order to obtain these goals Riordan Manufacturing will need to have a strong production plan.
Strategic Capacity Planning
Riordan Manufacturing has Chinese business partners with facilities in China. These facilities are in close proximity to the Qiantang River. The river access leads to Hangzhou Bay, which is sufficient to handle our shipping needs. Therefore, Riordan Manufacturing made a decision to take the electric fan process design supply chain to China.
In order for this new location, Hangzhou, to be profitable, Riordan Manufacturing will need a strategic capacity plan which will provide an approach for determining the overall capacity level of capital-intensive resources—facilities, equipment, and overall labor force size—that best supports the company’s long-range competitive strategy (Chase, Jacobs, & Aquilano, 2006). The capacity level has a critical impact on the Hangzhou location. If capacity is inadequate, Riordan may lose customers through slow service or by allowing competitors to enter the market (Chase, Jacobs, & Aquilano, 2006). If capacity is excessive, they may have to reduce prices to stimulate demand; underutilize its workforce; carry excess inventory; or seek additional, less profitable products to stay in business (Chase, Jacobs, & Aquilano, 2006).
In the Hangzhou operation, most of the raw materials and finished products are being shipped from Hangzhou Port to Shanghai Port, then to their final destinations. Therefore, the continuance of shipping between Hangzhou and Shanghai could be costly.
Lean Production Technique
Riordan Manufacturing’s whole aim of using the Just-in-Time (JIT) lean production...