Week 4

Learning Team B; Riordan Strategic Capacity Planning

Rachel Dickson, Christine Fowler

OPS/571

November 26, 2012

Trina Greer, PhD

Abstract

In this paper Team B examines the current process design and supply chain of Riordan Manufacturing and discusses possible improvements.

Riordan Strategic Capacity Planning

Riordan Manufacturing produce electric fans from their factory in Hangzhou China. This plant is a decentralized unit of the company and creates its own production schedules to meet sales forecasted by looking at prior demand (Apollo Group, Inc., 2012).

Current Process Design and Supply Chain

Although the fans are assembled and the plastic parts manufactured at Riordans Hanzhou plant, outside contractors in China provide the electric motors used in fabrication, and the materials used to create the plastics are bought from local sources.

The fans are made to stock and then shipped out to the customers. The factory also offers a customization option whereby the customer is given a price based on the number of fans they plan to order in a year, but then the fans are made to order when specific quantities are requested from the customer. This can prove challenging for short-term supply chain management as the orders are received at random, so a supply of materials is kept in inventory. This guarantees that the factory will be able to fulfill orders, even if their local sources are not able to deliver on time.

Fans are delivered using FedEx and a rival Chinese firm, the Chinese firm is cheaper than FedEx for delivery within China, and using both companies for international delivery helps ensure that shipments meet the client’s delivery deadline.

Strategic Capacity Planning

To reach its maximum capacity, Riordan Manufacturing must be able to measure both the inputs available and the output. Overhead and machines are...