Process_Design

Process Design for Riordan Manufacturing Brianne Freeman UOPX CC09MBA01 OPS 571 February 16, 2010 Professor Gina Woullard Date:- Sender’s Address:- Recipient’s Address:- Dear CEO: Attached please find the proposal for implementation of a new process design for Riordan Manufacturing. The two main issues that this location faces is the contracted company’s inability to exceed a 93% on time delivery average and the paper-based receiving, inventory, and shipping processes. The new process should include a faster on-time delivery system that meets and exceeds the Six Sigma standard. An MRP system is a model investment for Riordan. Riordan can effectively manage its inventory with the MRP system and increase productivity by adjusting production schedules real-time between the Pontiac and Hangzhou facilities. Lean production aims to cut costs by making the business more efficient and responsive to market needs. Elimination and reduction of waste will gradually and efficiently help raise earnings and profits, and the elimination of wastes and unproductive activities, tasks and behaviors in the work place will surely help the company and its personnel focus on the demands of the customer. Please let me know your feedback. If there are any changes required or suggestions, please e-mail me XXXX@XXXX.com or call me at XXX-XXX-XXXX. Sincerely, Riordan Manufacturing is a global plastics manufacturer operating three domestic plants and one international plant in Hangzhou, China. The Chinese unit produces fans, fan parts as well as customized plastic parts that are shipped from the Michigan plant. The inventory process could use improved efficiency, process design, and a smoother supply chain for the manufacturing of the electric fans. The new process should include a faster on-time delivery system that meets and exceeds the Six Sigma standard. The facilities in Hangzhou, Albany, and Pontiac direct provide quality oversight for the operational activities regarding the processes for both manufacturing fans and fulfilling orders. An improved process will make improvements from the beginning stages of the process the order-taking process through the final step of delivering the product to the customer. The China location produces fans based on customers’ demand, and it provides its own product forecasts, orders raw materials, electric motors, and polymers through company purchasing agents from local companies. The two main issues that this location faces is the contracted company’s inability to exceed a 93% on time delivery average and the paper-based receiving, inventory, and shipping processes. Process Design The current process at Riordan is manual—from the receiving of raw materials to the final product that is then delivered to the customer. Manual processes lend themselves to human error, which could lead to inventory loss, increased production costs, and revenue loss. Currently, a hard copy form is used to receive or ship material from stock, and is then sent to the other departments for processing. Efficiency is decreased in every department because of the physical transaction time and data entry required. A scanner and online system that can capture shipping and receiving will save processing time as well as decrease the occurrence of human error. Supply Chain Many metrics can be used for operation of a supply chain, but from the most important are availability of product or components at the right place and time, total lead time in the supply chain network, and total cost of the supply chain and the product line. The current supply chain process is not efficient for Riordan Manufacturing.  There is no communication between departments, factories, and suppliers, resulting in wasted labor and over production. The goal is to provide communication between departments, factories, and suppliers to create a more efficient and effective way to meet customer expectations and reduce product waste. The supply chain process can concentrate on the inventory management process to fulfill the requested orders (Chase, 2006). To realize optimal performance from the supply chain process, it is important to track the inventory need and quality in timely manner. Riordan must focus on management of inventory from the raw material to completion of the finished product. Material Requirements Planning System Riordan Manufacturing has reached a critical point in their business cycle in relation to the production of electric fans.  Labor-intensive and costly manufacturing processes show the need for major changes. The implementation of a material requirements planning (MRP) system would enable Riordan to restructure the production processes for the electric fans and leave room for growth in areas of supply chain, process design and employee satisfaction. The goals of the new MRP will focus on ensuring the availability of materials for production and customer delivery, maintain the lowest possible inventory levels that support service objectives and plan manufacturing activities, production schedules and purchasing activities. An MRP system that can accurately track and manage raw materials and finished product inventory across all plants is what is needed to reduce the inventory costs of raw materials and finished goods. The MRP system is a model investment for Riordan. Operational success and cost improvement by any material requirement planning system requires accurate and reliable estimates of production. Riordan can effectively manage its inventory with the MRP system and increase productivity by adjusting production schedules real-time between the Pontiac and Hangzhou facilities. Production Forecast Adoption of lean production process is said to be the best business strategy to respond to the market needs to introduce the right product at right time in right place with right quantity to follow perfect workflow of execution by reducing waste and flexibility to respond to the changes (Shields, 1999). Lean production aims to cut costs by making the business more efficient and responsive to market needs. Lean production not only reduces operational costs but also targets to boost, restore and significantly raise the competitiveness of a company. The lean approach cuts out all activities that do not add value to the production process, such as holding of stock, repairing faulty product and unnecessary movement of people and product around the plant. There are several advantages of implementing lean production techniques (Grooms, 2007). The first advantage is the reduction of manufacturing time. Lean production helps companies retain, maintain and significantly increase their earnings, widen their margins and help them generate savings from lower costs (Grooms, 2007). “It is found that in general, companies implementing and adhering to lean production practices significantly increase manufacturing productivity because time and efforts are principally targeted by the lean production processes” (Grooms, 2007). Elimination and reduction of waste will gradually and efficiently help raise earnings and profits in companies, and the elimination of wastes and unproductive activities, tasks and behaviors in the work place will surely help the company and its personnel focus on the demands of the customer. References Chase, Richard B., Jacobs, F. R., & Aquilano, Nichlas J. (2006). Operations management for competitive advantage (11th ed.). New York: McGraw-Hill. Grooms, D. (2007, October 16). The Advantages of Lean Manufacturing. Retrieved February 1, 2010, from http://ezinearticles.com/'The-Advantages-of-Lean-Manufacturing&id=784987 Shields, T. (1999). Tutorials - lean production / lean manufacturing. Defense Aquisition University. Retrieved February 12 2010, from http://www.dau.mil/educdept/mm_dept_resources/navbar/lean/01rdg-lean.asp