Production Plan for Riordan Manufacturing
Riordan Manufacturing strives to be the leader in using polymer materials to provide
solutions to customers 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 companys 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 Manufacturings whole aim of using the Just-in-Time (JIT) lean production
technique for the electric fan facility in China is to help reduce the amount of resources
used throughout the production process. In accomplishing this, the JIT lean production
process will minimize use of facility space, materials and supplies, stocks, labor, capital
and time. This, in turn, will reduce costs by increasing production efficiency and overall
output.
This lean production technique involves using a range of practices designed to reduce
waste and improve productivity and quality (Chase, Jacobs, & Aquilano, 2006). The JIT
principles use tools, and techniques that allow Riordan Manufacturing to produce and
deliver products in small quantities, with short lead times, to meet specific customer need
(Chase, Jacobs, & Aquilano, 2006).
Simply put, JIT delivers the electric fan products at the right time in the right amounts for
