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Operation and Product Management

Airvent Fans Co. faces increasing demand for ceiling fans that exceeds its current production capacity. While Airvent was previously able to meet demand with a fixed batch size, growing demand is no longer being met. The production process also needs better strategic alignment. Airvent prioritizes quality and flexibility, as demonstrated by its variety of fan models and latest automated machinery. However, an internal analysis shows capacity utilization is only 98.4%, and the fixed batch production process can no longer accommodate rising yearly demand forecasts through 2020. Changes are needed to increase capacity and flexibility.

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Ibrahim Jawed
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191 views

Operation and Product Management

Airvent Fans Co. faces increasing demand for ceiling fans that exceeds its current production capacity. While Airvent was previously able to meet demand with a fixed batch size, growing demand is no longer being met. The production process also needs better strategic alignment. Airvent prioritizes quality and flexibility, as demonstrated by its variety of fan models and latest automated machinery. However, an internal analysis shows capacity utilization is only 98.4%, and the fixed batch production process can no longer accommodate rising yearly demand forecasts through 2020. Changes are needed to increase capacity and flexibility.

Uploaded by

Ibrahim Jawed
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Operation and Product Management

Mid Term Exam


Airvent Fans Co.
Introduction:
Airvent Fans Co. was established in 1988. Airvent makes variety of ceilings fans for it
customers. The first Airvent plant was completely manually operated but now the Rajan the
owner of the company helped Airvent Fans Co. expand to a position where it serves to customers
all over India, having a huge plant with latest automated machines and skilled labor. ensuring
high quality products and making Airvent a favourite among ceiling fan OEM brands in the
country. Airvent manufactured 28 variants of fan based on different wattages and different blade
sweeps and colors for its customers. Airvent catered to to main players in the fan industry in its
region; Tropical Fans and WindStar.

Problem Statement:
The problem that Rajan is currently facing is that demand for ceiling fans all over India is
increasing at an CAGR of 9-10%, and currently the production process which Airvent are using
cannot meet the required demand in the current year (2017) and the forecasted 2018, 2019 and
2020 demand.
The batch size of Airvent production was fixed which always met the required demand but now
it no longer met the demand. The lost demand could impact the image of the company.
The production process was not properly strategically aligned it needs to be synced.

Competitive Priority:
The competitive priority of the company is towards quality and flexibility. The latest automated
machines and skilled labor ensured its quality and the variety of different fans offered flexibility.

Internal Analysis of the Company (Current):


Capacity:
The company has the capacity to produce 3200 Fans/day. It operated 250 days in a year making
its capacity 800,000 fans/year at full capacity.
Currently the company is making 787,500 fans/year making its capacity 98.4%
(787500/800000).
Facility:
The company has latest automated machines. The plant consists of steel stamping stations,
injection molding setup, extrusion tube setup, riveting shop, two paint shops and an assembly
line. Most of the production is done in house while some parts such as aluminum die cast, axle,
capacitors, iron supports, rivets etc were outsourced.
The company lies between batch and assembly line in product process matrix.
Product Design:
Airvent manufactured 28 variants of fan based on different wattages and different blade sweeps
and colors for its customers. (Exhibit -1)
Process Technology:
The company has latest automated machines.
Labor:
The company had skilled labor to ensure high quality products.

Policies and Procedures:

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