In the contemporary environment of global competition, firms need to continuously strive to improve their capabilities to promote efficient delivery of their goals and objectives. Riordan’s global leadership in plastic manufacturing highlights its effort to maintain its competitive advantage through judicious exploitation of its capabilities and capacity usage in its electric fan unit in Hangzhou, China. Lean production and strategic capacity planning therefore has become critical elements of success as it helps to identify best approach for optimal use of ‘capital intensive resources – facilities, equipment and over all labor force size’ (Chase, Jacob & Aquilano, 2005, chapter 11, 431).
The lean production helps it to reduce wastage through flexible schedule that are designed to meet the changing requirements of the market. For current and new process design, Riordan has focused on its lean production processes and logistic effectiveness of its supply chain management. Lean production emphasizes the role of management in encouraging streamlined processes in the productivity. It is based on the principle that ‘nothing will be produced until it is needed’ (ibid, chapter 12, 471). This results in higher productive outcome as un-utilized inventory is minimal.
At the same time, effective logistics in supply chain ensure that products timely reach the desired market to meet the demands of the consumers. Shifting its manufacturing unit to Hangzhou would be cost effective. Improving its supply chain management would enhance its operational efficiency in customization as timely delivery of supply of essential stock like electric motors would eliminate shortages and also need for keeping safety stock. Thus continuous improvement initiatives in business processes, especially vis-à-vis lean production and supply chain would significantly contribute to the competitive advantage for Riordan manufacturing (ibid, chapter 10, 406).
(words: 282)ReferenceChase, R. B., Jacobs, F. R., & Aquilano, N. J. (2006). Operations Management for Competitive Advantage (11th ed. ). NY: McGraw-Hill/Irwin.