Riordan is an international manufacturer and leader in the industry for on plastic molding and injection, based in Georgia California. The company has also expanded to other developed countries like China where it has been located in Hangxou. The company is extremely famous for its production of fans depending on the size the client mat require. It also produces medical sizes among other plastic parts which are useful in everyday activities. To improve the production of the company, a strategic capacity planning needs to be developed. The plan may be short term as well as long term.
Long term capacity planning may involve a period as long as one year. This will always involve improvement of buildings and facilities involved in the manufacturing. Intermediate range is the second period of planning, and it involves monthly as well as quarterly plans for a period of between 6 and 18 months. This level involves layoffs, hiring, purchasing new tools, as well as subcontracting. Short range is the third planning period, and it involves less than one month and includes daily and weekly changing of processes to minimize variance between actual and planned output. In this range, some steps may include personal transfers, overtime, and alternative methods of production. The main aim of capacity planning is to introduce an approach that would determine the capacity level of resources, equipments, facilities and size of the labor. For excessive capacity, the company has to lower prices to encourage demand, change the workforce, cause more inventories or find more profitable products to stay in business as well as withstand pressure from competitors in this line of manufacturing (Pang, 2007).
As an approach to capacity planning and improvement, Riordan has made an extra move of getting international. Opening a branch in China was a sign of the dream that the company has over expansion. This was an adequate plan that would have helped the company cut on labor costs, which is relatively cheaper in China following high percentage of skilled labor.
Following the fall in interest rates, proper economic conditions, as well as low prices, Riordan has the potential to convert the low interest rates into new investments. The company may spread its manufacturing in the United States by bringing up sub branches that would increase production within the firms.
Other continents like Australia and Africa have an outstanding market which have not been invested in when it comes to plastic and fans manufacturing. Therefore, it would be a considerable move for Riordan Company to make investment in this field. This would fetch more clients to the company making it develop and win a new market (Pang, 2007).
Moving to other countries will in turn lead to the high cost of production for the company. However, this may only be a problem in the beginning of operations of the company in the country. After some time, it will be easy for the company to operate accordingly as the cost of production will have stabilized, and the company will be looking up to meet the high demand for its products (Rumaih, 1999). High cost of production would mean high quality work, which will attract more customers to the company.
Riordan would also focus in gaining a competitive advantage over its competitors by getting committed to growth and delivery of outstanding returns to shareholders of the company. In the long run, the company will have increased earnings per share for stakeholders. This will be a room for expansion by the company as customers will have gained the trust in products that Riordan manufacturers will be producing (Rumaih, 1999) High quality products and low prices will be a signature to large customer base for the company.
In general, it is possible to make Riordan expand and reach a substantial number of clients. This may be done through massive investment in premises as well as quality improvement, which would match competition in the market. It will be easy for the company to operate within a wide market, leading to higher performance.
Pang, Z. (2007). Strategic Capacity Planning in the Presence of a Spot Market and a Long-term Contractual Supply Channel. Hong Kong: Chinese University of Hong Kong.
Rumaih, A. A. (1999). A spare capacity planning methodology for wide area survivable networks. Parkland, Fla.?: Dissertation.com.