Case | HBS Case Collection | September 2002

Align Technology, Inc.: Matching Manufacturing Capacity to Sales Demand

by H. Kent Bowen and Jonathan P Groberg

Abstract

Align Technology is a four-year-old medical products company that has invented a new product requiring new manufacturing processes. Demand for the new product has grown more slowly than initial forecasts predicted, and the cost structure is preventing the company from becoming profitable. The manufacturing process involves six different operations located in California, Pakistan, and Mexico. The first dilemma requires downsizing the capacity until the demand grows. Increasing capacity in the future requires consideration of the time lags, costs, and incremental units of added capacity inherent in each of the six processes. Given the uncertainty of accurate sales forecasts as the company carries out new marketing initiatives, the manufacturing organization has been challenged to create a capacity plan to meet demand while lowering its fixed costs.

Keywords: Health Care and Treatment; Collaborative Innovation and Invention; Problems and Challenges; Product; Forecasting and Prediction; Marketing Strategy; Sales; Demand and Consumers; Production; Health Industry;

Citation:

Bowen, H. Kent, and Jonathan P Groberg. "Align Technology, Inc.: Matching Manufacturing Capacity to Sales Demand." Harvard Business School Case 603-058, September 2002.