Process_Design_for_Riordan_Manufacturing

Since the decision was made to move the Hangzhou plant to Shanghai, it has given Riordan the opportunity to ship higher volumes of finished product at lower costs to markets in Asia and Europe and allowing for greater profitability potential. The current China location applies material requirement planning to meet the time-phased requirement of material for the production of fan assembly and operations. This is the primary overseas locations where raw materials are collected and processed for molding. The units that are molded are used as input for trimming departments and are selectively used to create other parts. These particular parts are assembled to create higher components and are sent to the packaging department and distributed through the shipping department (University of Phoenix, 2010). Scrap material and problems achieving the orders based on an inconsistent production plan are high concerns for Riordan Executives. The desire and the need to minimize waste has forced the plant to utilize these spare parts to create customized fans for special orders. The utilization of these spare parts has reduce the cost of fan production. However, the lack of a defined pattern in orders leaves a gap in assessing the exact material requirement on short notice of these customized products. An optimization strategy to improve the process of MRP as well as the production, supply and demand of Riordan electric fans is the only way to successfully improve these issues. A New Process Design for the Production of Riordan Fans Currently, the electric motors used in the fans are completely assembled and purchased by buyers in the purchasing department from a local Chinese company. The on-time deliveries of this company over the past year has averaged only 93% (University of Phoenix, 2010). The company should consider an alternative manufacturers to meet the forecasted production of motors. Choosing an alternative manufacturer will increase competitiveness among the manufacturing unit and the percentage of the delivery schedule will increase significantly. Another option is to keep assembled supplies of motors as inventory or "safe stock" in the Riordan inventory. Although this will increase inventory cost, the company can lower the stock of plastic polymer and reduce the financial burden. This will work because of the plastic polymer used in the electric fans has plenty of local suppliers that can be accessed easily so the company can reduce the stock in order to accommodate the extra stock of motors. In order to improve the existing process of the China Riordan Manufacturing Plant, key processes involved in the material plan requirements and supply chain processes need to be adjusted to improve the efficiency of production. Lean production using just-in-time system can be extremely effective as well as better strategic planning for meeting the customer's demands (Larson, 1998). Supply Chain For Electric Fans The supply chain management process is the very center of all core operational processes of a company. It plays the role of a central nervous system regulating the product flow by managing the associated information flow that runs through a company. To effectively meet customer requirements such as low costs, quality and shorter lead times and high product variety, the supply chain networks are solutions to consider. The success of the China plant continuing even with the move to Shanghai depends on effective strategic and tactical planning and monitoring of the supply chain at the operational level. It will also depend on strategic capacity planning in which the objectives are to identify and solve capacity problems in a timely manner to meet customer needs and to maintain a balance between required capacity and available capacity (Pang, 2007). These objectives will support Riordan's long term competitive strategies by integrating alternative manufacturers with greater capacity and introducing new resources that will benefit both Riordan and these new partners. In order for Riordan to implement an improved, lean supply chain several options are available that are cost effective and easy to access. Outsourcing is one approach that can take care of several components of the supply chain and transfer responsibility and decision making to other companies. The management of inventory can reduce the cost of the company's own distribution center from a remote location which handles logistics (Pang, 2007). The supply chain process can concentrate solely on inventory management process in the system to fulfill the order requested. Eliminating wasteful activities and processes by using lean logic is the key to reducing product cost. Continually reducing and controlling current and potential supply chain costs requires the company to develop and open network with its suppliers to work for mutual, long term benefits ( Chase, 2006). Production Forecast For the Riordan Electric Fans The demands for the next year's production of the electric fans are calculated on the basis of average sales for the last three years which is projected by the coming year according to the information provided by Riordan's intranet (University of Phoenix, 2010). Based on the yearly production of the electric fans the estimation of costs for planning, scheduling, production and delivery is off because there is not an effective forecasted production plan in place to meet demands. The implementation of a lean production process would be the best solution and strategy to counteract with the needs of the market. Cover Letter: March 30, 2010 Dear CEO: With great enthusiasm and respect, we are pleased to introduce a proposal for the implementation of a Lean Production and Total Quality Management for improving the Process Design of Riordan Manufacturing. The implementation will take on two phases. Phase one of the project will identify all bottlenecks involved in the process of the production plan and the forecast demand to achieve balance of satisfying the customer's needs and meeting the quantity of Riordan electric fans ordered by the costumer. The second phase will research and calculate the results of phase one to forecast next years demand in order to fully meet and exceed all of the supply and demand that is currently lacking in the Process Design. Applying and implementing the concepts of six sigma to defer prevention, reduce cost, ensure the best quality and enhance the production process as well as other project parameters will be used as well as other statistical and operational measurement analysis tools. Please contact me with feedback or if there are any changes needed to be made as well as any suggestions you may have regarding the project. I can be reached by email at tlmcgary@gmail.com or at 504-264-3244. Sincerely Tracy McGary REFERENCES: Chase, Richard B., Jacobs, F. R., & Aquilano, Nichlas J. (2006). Operations management for competitive advantage (11th ed.). New York: McGraw-Hill. Larson, M. (1998). Five days to a better process: Are you ready for Kaizen' Quality, 37(6), 38-44. Retrieved March 15, 2010, from ABI/INFORM Complete. (Document ID: 30185711). Pang, Z.. (2007). Strategic capacity planning in the presence of a spot market and a long-term contractual supply channel. Ph.D. dissertation, The Chinese University of Hong Kong (Hong Kong), Hong Kong. Retrieved March 12, 2010, from Dissertations & Theses: Full Text.(Publication No. AAT3302451). University of Phoenix (2009). Riordan manufacturing virtual organization. Retrieved September 23, 2009, from Apollo Group, Inc., Week Four, OPS571- Operations Management.