Foldrite Furniture

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JUNE 18, 2010

STEVEN C. WHEELWRIGHT

AFARIN BELLISARIO

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FoldRite Furniture Co.:

Planning to Meet a Surge in Demand

On a Friday afternoon in February 2010, Jose Ramos, VP of Manufacturing at FoldRite Furniture

Company of Aurora, Colorado, stopped by the office of Martin Kelsey, the recently hired production

manager, to discuss developments revealed in a conference call with sales managers that morning.

The call had been upbeat; market demand for FoldRite’s products was unexpectedly high—and

heightened demand, even if temporary, was welcome news during a deep recession. However, the

news placed a burden on the firm’s operations management, which had to optimize the use of

manufacturing resources while meeting product quality standards and delivery schedules. Ramos

looked to Kelsey to develop a production plan for the next six months based on the new forecast.

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Traditionally, end-customer demand for FoldRite products increased in the spring and summer,

due to the increased number of social functions that required folding tables and stackable chairs.

These events normally started in May, with proms, graduations, and weddings, and continued

through the summer with conventions and business meetings. Distributors’ requests for delivery by

early May meant that FoldRite needed to increase shipments to distributors in April.

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Ramos believed the increased demand was the result of strategic decisions that management had

made a year earlier: FoldRite had replaced the company’s lines of simple, functional folding and

stackable furniture—which were easily imitated by low-cost foreign competitors—with a smaller set

of stylish, innovative, and environmentally friendly products. The projected demand included the

stocking requirements for the company’s new, high-comfort folding chair, the CloudChair, as well as

a normal seasonal demand surge for other FoldRite products. The early demand for CloudChair was...