Strategic Capacity

Strategic Capacity

Strategic capacity is stated to be an approach for determining the overall capacity level of capital intensive, resources facilities, equipment, and the labor force size that best supports the company's long-range competitive strategy (Chase, Jacobs & Aquilano, 2006). Strategic Capacity can have a big impact on Riordan Manufacturing response rate, cost structure, inventory policies, their management, and their staffing support requirements.

Riordan 's is one of the most leading manufacturing in their industry, and the strategic capacity planning can have an impact on the new products they are trying to place in the new market. If the company does not use a system, such as strategic capacity planning this company is allowing problems to occur such as bottlenecks. Bottlenecks are when production comes to a point that it is slowed down. This enables the manufacturing part of the assemble line to stop producing at a high capacity rate. In any company this is a problem that should be avoided at all cost.

By Riordan's using the strategic capacity planning they can discover it is a very voluble system to use for their company, there need to be some kind of system use to keep the levels of the output and the input balance at all times. Strategic capacity planning allows any business the advantage of preventive overload in their system. A company like Riordan's who produces different products on a global level they need to have a flawless system to prevent any mishaps. Strategic capacity planning allows Riordan's to keep track of their manufacturing and shipping on all level without any mistake.

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