Process_Design_for_Riordan_Manufacturing

Process Design for Riordan Manufacturing University of Phoenix OPS/571 Abstract Riordan Manufacturing is a fortune 1000 enterprise that manufactures many different products including: Plastic Bottles, Electric Fans, Heart Valves, Medical Stents, and Custom Plastic Parts. This proposal package will discuss the MRP for the manufacturers, process design for the company’s production, supply chain for electric fans taking advantage of global opportunities, production forecasting, and an implementation plan. It will also include a cover letter detailing the coordination of aggregate planning and TQM for Riordan electric fans. Process Design for Riordan Manufacturing Riordan Manufacturing, Incorporated is a global plastics manufacturer and industrial leader in the field of plastic injection moldings (University of Phoenix, 2004). Riordan Manufacturing operates a plastics plant in Hangzhou, China that acts as a decentralized unit of Riordan Manufacturing and produces electric fans (University of Phoenix, 2004). The following proposal package will address a new process design focusing on all phases of the manufacturing of the electrical fan including determination of raw materials needed for production. The proposal will also outline the design to remove the bottleneck in the process to optimize it for meeting the demands of customers by supply chain concepts. Production forecasting for the electrical fans are discussed as well as the implementation plan of Lean Production using the Gantt charts. Finally, the proposal will offer a cover letter detailing how to coordinate aggregate operations planning and Total Quality Management for the Riordan electric fans. Material Resources Planning Material Requirement Planning (MRP) is a production plan and an inventory control system used to manage a manufacturing facility. Three objectives to the MRP systems are: guarantee product and material availability to the customers, maintain a low-level of inventory, and plan for on time delivery schedules and purchasing activities. The function of an MRP system will include control, bill of material processing and easy scheduling. The present process of the Riordan Manufacturing electric fan is within the China plant. Purchasing raw materials for Riordan’s electric fans is provided by local distributors. Raw materials from suppliers are delivered to Riordan's receiving department and team members move the raw materials to the factory. All shipping documents are processed through the inventory clerk. Shipping documents include type of material, supplier, and the amount of material. When raw material is drawn upon during manufacturing, it is indicated on a raw material usage form that is given to the inventory clerk. Once the raw materials have been processed the inventory clerk is given the number of sub-assemblies and products completed for the day. Inventory, which has been sold, and ready to be shipped are moved to the packaging department, packaged and move to the shipping department. Each department is required to file reports stated numbers '''with the inventory clerk thus, inventory can be monitored. An up-to-date database system could improve customer satisfaction. The new database system will tie the forecasting system, carry out automatic ordering of raw materials as-needed and remove products from inventory as the fans are sold. New Process Design for Production Manufacturing at Riordan’s China plant currently works based on the number of fans scheduled for production. A local company is contracted to provide motors for production based on a projected manufacturing schedule. Organizational reporting indicates this company only meets expectations 93% of the time that does not meet Riordan’s expectation of 98%. Running out of motors can cause a bottleneck in production so one of the first process changes is to add an additional motor supplier to supplement the existing supplier. Not only will supply expectations be met but also competition among suppliers may provide better pricing for Riordan. Production will be altered from a push process to a pull process to create a just in time delivery model. The aim of this model is for continual flow of production through the plant seeking to remove steps of waste and overproduction. Keeping a surplus of stock on hand results in high carrying costs and warehouse fees that can be avoided through operational excellence (Romano, Santillo, and Zoppoli, 2008). A pull system is also beneficial to the make-to-order process currently marketed by Riordan. Using just-in-time production is in line with the lean system and is very effective in operation processes and in assisting with better strategic planning to meet customer current and future customer demands. Supply Chain The supply chain management process is used by businesses to streamline their respective processes, reduce costs, and create a lean environment. To achieve a lean supply chain process a business must evaluate all processes to ascertain areas wherein a reduction or elimination of waste is obtainable. Waste is often present in all aspects of the business process from the strategic level, tactical level, and operational level. Supply chain management exhibits strong connections between other management processes, such as product development, purchasing, and customer service. Riordan’s recent move of the fan manufacturing processes to China provides Riordan the opportunity to employ labor at a much lower rate than in the United States as well as minimize delays and costs associated with raw materials. The main supplier of electric fans is in China therefore raw materials became more readily available. The relocation of manufacturing streamlines the production of the electric fan however, the delivery of the fan back to the customer in the United States must also be considered. To sustain the recent custom order program, Riordan must have distribution centers strategically around the world for the sole purpose of distributing inventory. To meet demand without building large inventories, Riordan will shift from a push-based supply chain to a pull-based supply chain. This means that production quantity is not based on forecast orders determined by what Riordan believes it can sell, instead, the pull-based supply chain and all aspects of the production channel, procurement, production, and distribution, are based on customers’ orders and what they believe they can sell. This electronic process offers customers the ability to replenish, sustain inventory, and forecast for future inventories. Forecasting future inventories is calculated and agreed upon based on upper and lower limits, which are previously established between Riordan and customer (Chase, 2006). Production Forecast An opportunity to review the Riordan process is to assess how much production is required to meet estimated sales in a particular forecasting period. This information will help managers set production schedules through the review of previous sales. Some of the factors that may affect the production forecast involve economic indicators, the consumer needs within the forecasting period, and other potential products on the market. Production forecasting is an important component with an organization’s business plan as it will affect the production schedule, delivery, and sales of the final products. In the customized electric fan operation, Riordan does not forecast the follow on orders, rather maintains an inventory, they refer to as safety stock of polymer material to produce more fans quickly. The opportunity to address the delivery rate and production needs is an example where production forecasting can benefit Riordan operations. Studies support the need for production forecasting as a means by which constant production rates can be maintained thus resulting in a more consistent balance of inventory, production, deliver, and sales (Bitran, et al. 1986). Riordan operations can benefit from consistent production thus balancing their inventory and reducing a need for a safety stock. The approach employed through production forecasting is a proactive business operation rather than the reactive approach taken by Riordan. An organization that plans forward can control and visual the components of the production process and not react to things that can be controlled. Production forecasting is a system that can create efficiencies and reduce cost for an organization. Conclusion Riordan Manufacturing operates a plastics plant in Hangzhou, China that acts as a decentralized unit of Riordan Manufacturing and produces electric fans (University of Phoenix, 2004). The proposal package identifies a process design that shifts from a push process to a pull process and supports the MRP. The MRP implements a data base that connects forecasts and auto ordering with the supply chain electronic system wherein the customer orders for their respective forecasts not Riordan’s forecast. In addition, to the electronic system Riordan will strategically locate distribution centers to minimize shipping costs and increase delivery times to customers. Team B believes that this proposal contains the necessary plansto lean the production process for Riordan’s electric fan manufacturing process in Hangzhou, China. Riordan Manufacturing Inc. One Riordan Plaza San Jose, CA. 95112 (408)555-0157 Dear General Manager: The aggregate operations of Riordan electric fans will include the coordination process that will be used in the planning phase that will be used as a guide to creating a successful business practices for this organization Then goal of aggregate planning is to achieve the best plan of production that will effetely utilize the companies resources that will satisfy the customer demand. This plan includes significant factors in handling schedule management, increasing staff, implementing training classes which all can be a challenge if these things aren’t planned precise. Aggregate operations planning in the Riordan Manufacturing Company will focus on the forecasting of how well the company is projected to do in the market. Management will handle the schedules based upon the average monthly volume of customers purchasing electric fans. This will allow the company to notice trends which will help them to not over or under staff. Seasonal staff will be hired as needed during the busier times of the year. Coordination of aggregate planning is useful for Riordan because it allows them to experience seasonal or other fluctuation in demand or capacity that will help them adapt to changes within the plan. Training classes would be used as a part of higher job education learning such as: web training, seminars, and on the job training. Sincerely, Team B References Bitran, G., Haas, E., & Matsuo, H. (1986). PRODUCTION PLANNING OF STYLE GOODS WITH HIGH SETUP COSTS AND FORECAST REVISIONS. Operations Research, 34(2), 226-236. Retrieved from Business Source Complete database. Romano, E., Santillo, L.C., Zoppoli, P., (2008). The change from push to pull production: affects analysis and simulation. Retrieved September 30, 2010, from http://www.wseas.us/e-library/conferences/2008/spain/selected/selected09.pdf