Production Plan for Riordan Manufacturing Ops 571

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Date Submitted: 04/08/2011 09:37 PM

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Production Plan for Riordan Manufacturing

Production planning includes strategic capacity planning and lean production to provide the most efficient and cost effect process design and supply chain. Riordan Manufacturing has a capacity plan in place that supports both the design capacity and the output plans for the organization however remaining competitive in a rapidly changing business requires constant process evaluation. Strategic capacity planning and lean production may aid Riordan in reaching the best operating level. The purpose of this paper is to address the potential process improvements concerning strategic capacity planning and lean production for the Riordan Manufacturing organization to provide solutions that will provide the company with a competitive advantage.

Strategic Capacity Planning

Product assembly is labor-intensive and seeking the lowest cost labor intuitively makes sense. Riordan Manufacturing must reevaluate labor cost and labor skills in China, a possible move to Shanghai, increased international trade and transportation costs, and raw material costs to identify the least costly method of sourcing, assembling, and distributing product to meet customer demand.

The objective of strategic capacity planning is an approach for determining capacity level of capital-intensive resources (Chase, Jacobs & Aquilano, 2006). Capacity plays an important role in a company’s competitive strategy. All resources, including facilities, equipment, and labor affect strategic capacity planning. With many variables, strategic capacity planning is very malleable in fitting a specific need. A poorly developed strategic capacity plan could lead to problems for a company. If a company has a large industrial warehouse and produced a generic, but time sensitive, product the company could maximize profits and customer service by purchasing raw materials in bulk and producing a large inventory of product. This particular plan would not be effective if there was...