Foldrite Furniture Case

On a Friday afternoon in February 2010, Jose Ramos, VP of Manufacturing at FoldRite Furniture Company of Aurora, Colorado, stopped by the office of Martin Kelsey, the recently hired production manager, to discuss developments revealed in a conference call with sales managers that morning. The call had been upbeat; market demand for FoldRite’s products was unexpectedly high—and heightened demand, even if temporary, was welcome news during a deep recession. However, the news placed a burden on the firm’s operations management, which had to optimize the use of manufacturing resources while meeting product quality standards and delivery schedules. Ramos looked to Kelsey to develop a production plan for the next six months based on the new forecast.

Traditionally, end-customer demand for FoldRite products increased in the spring and summer, due to the increased number of social functions that required folding tables and stackable chairs. These events normally started in May, with proms, graduations, and weddings, and continued through the summer with conventions and business meetings. Distributors’ requests for delivery by early May meant that FoldRite needed to increase shipments to distributors in April.

Ramos believed the increased demand was the result of strategic decisions that management had made a year earlier: FoldRite had replaced the company’s lines of simple, functional folding and stackable furniture—which were easily imitated by low-cost foreign competitors—with a smaller set of stylish, innovative, and environmentally friendly products. The projected demand included the stocking requirements for the company’s new, high-comfort folding chair, the CloudChair, as well as a normal seasonal demand surge for other FoldRite products. The early demand for CloudChair was especially strong. The chair had won a number of design awards when introduced at an industry show in October 2009, and the company quickly received inquiries from event planners and industry distributors. Now, the sales force was signaling that initial orders would swiftly exceed the firm’s expectations.

“Make sure your plan puts all the pieces together,” Ramos told Kelsey, “and get it to me by 8 AM Wednesday. We can discuss it, and you can make any needed changes in time for Thursday’s upper management meeting.”