University of Phoenix/OPS 571
Riordan Manufacturing is a global plastics manufacturer and industry leader in the field of plastic injection molding with locations in Georgia, Michigan, California, and their most current expansion in 2000 to Hangzhou, China. The plant located in China manufactures fans using a make-to-stock operation that uses a forecasting method to determine future demand. A review of their strategic capacity planning and lean production for their new process design and supply chain process for the electric fans will address bottleneck and supply chain issues. Also outlined are the details of new processes and how the benefit the company.
The demand for fans is forecasted based on taking the average of sales for the last three years and extrapolating it into the following year. This forecasting method assumes history will repeat itself within manageable limits. “The objective of strategic capacity planning is to 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, 2005 p.430) There are several ways to improve this current method of operation. First, the forecasting should include customer demand in order to minimize waste. One of the requirements for determining capacity is to use forecasting techniques to predict sales for individual products. “Time Series analysis is based on the idea that data relating to past demand can be used to predict future. Past data may include several components, such as trend, seasonal, or cyclical influences.” (Chase, Jacobs, & Aquilano, 2005 p.518) The future demand for fans should be based on time series analysis using monthly sales trends.
The China plant manufactures both basic electric fans and custom order electric