Production_Plan

Running head: PRODUCTION PLAN FOR RIORDAN MANUFACTURING Production Plan for Riordan Manufacturing. Eveny Salinas May Gaffy Pushpamitra Khuntia University of Phoenix Operations Management OPS/571 SC09MBA02 Mr. David Bridgeman March 4, 2010 Production plan for Riordan Manufacturing Riordan Manufacturing, Inc. is an industry leader in the field of plastic injection molding. The company's research and development is located at the corporate headquarters in San Jose; its production centers are in Georgia, Michigan, and China. Ricordian’s Chinese operation is a joint venture between Riordian manufacturing and a consortium of Chinese nationals. This paper illustrates the authors views on implementing changes to the production plan used at the China plant and the strategic capacity planning and lean production methods required for the new process design and supply chain process to be implemented at the China plant.   Process improvements The company can implement the following procedures to improve the production process – implement ERP software that implements the JIT strategy for raw materials as well as finished goods; implement TQM strategy; open strategically located distribution centers to reduce the wait-time, benchmark all operations against competitors; implement best practices throughout the company; and base payments and incentives on milestones achieved. These steps will help the company to reduce costs by 10 percent and also improve the percentage for on-time deliveries from 93 to 99 percent. Supply Chain Supply chain management refers to the supply of raw materials, manufacturing the products, and distributing the products through the distribution network. Some of the major supplies involved in manufacturing electric fans at the Chine plant are – electric motors and plastic polymers purchased from local Chinese companies. Forecasting the demand for standardized fans is done using the make-to-stock method by using an average of sales for the last three years and extrapolating it to the next year. The Chinese plants also handle custom orders for electric fans; yearly demand for these products dictates the demand estimates. To handle unexpected orders, the plant maintains a safety stock and also requires the suppliers to do the same. The existing supply chain can be improvised further by implementing the Just-in-time strategy for supply management and introducing strategically located distribution centers. The JIT strategy aims at monitoring the inventory process so that the costs associated with inventory control and maintenance be reduced, and goods be delivered to the customers within the shortest time-frame and thereby avoid any taxes that maybe applicable for large inventories. To implement the JIT approach, its’ essential to know how long it will take for shipping the item from the supplier to the manufacturing facility and the anticipated life of the item, so that the company can establish procedures on when to reorder the item. To improve the supply chain and network, the China plant can open different distribution centers that can be strategically located based on various factors like - proximity to customers, business climate, costs, and availability of labor.  These distribution centers will be responsible for assembling fans and shipping the same to the customers. Because the location of these centers will be closer to that of the customers, shipping costs and lead time can be substantially reduced, thus enabling the timely delivery of products to the customers. Strategic Capacity Planning “Strategic Capacity planning is a process to predict the types, quantities, and timing of critical resource capacities that are needed within an infrastructure to meet accurately forecasted workloads.” (Schiesser, 2004) The Strategic Planning Division of Riordan Manufacturing is a business system which facilitates future requirements and goals that are critical to increase profits. The game plan -that was created by the strategic planning division- lists crucial goals and key strategies for the business future success. Having a list of keys to success strategy shall permit for having a clear path to gain the listed goals. The Hangzhou, China location for Riordan is a unit that manufactured electric fans for sale to customers all over the world. It has a very special capability of offering special custom fans and equipment to its buyers. While Using Strategic capacity planning, it is clear that several bottlenecks do exist in the process. The river access leads to Hangzhou Bay, which is enough to contain the shipping needs, that’s why, Riordan manufacturing have decided to take the electric fan process design supply chain to China. In order for this new location “Hangzhou” to be cost-effective, Riordan Manufacturing will need a strategic capacity plan that “ provide an approach for determining the overall capacity level of capital-intensive recourses-facilities, equipment, and overall labor force size-that best supports the company’s long-range competitive strategy” (Chase, Jacobs, and Aquilano, 2006) In the present time, Riordan Manufacturing does not have a flourishing strategic plan. In order to create one, riordam shall reduce the bolttlenecks that exist in inventory and suppliers, eliminate the cost of raw material, and use “Just in time” method, that will help the delivery of materials at proper timing. Morover, the company shall increase the number of vendors. Strategic capacity is mostly seen as the amount of output which thesystem is able of attaining over a certain time. It is a fact that capacity palnning is based on overall production. The purpose of strategic capacity planning is to offer labor establishment, and gives the business a competitive edge, however, the capacity level is crucial for the business, when riordan Manufacturing has insufficient capacity, the company may lose customers and may allow more competitors in the market.In the mean time, if the company has extreme capacity, prices may be reduced, and it may end up carrying undesired inventory or add low profit business lines just to stay in the market. “The capacity level selected has a critical impact on the firm’s response rate, its cost structure, its inventory policies, and its management and staff support requirements”. (University of Phoenix, 2010). Refrences -[pic]Chase, R., Jacobs,F., & Aquilano, N. (2006).[pic] -[pic]Operations management for competitive advantage. New York: McGraw Hill/Irwin. University of Phoenix(2005). -Riordan Manufacturing. Retrieved October 1, 2009, from University[pic] of Phoenix, week Three, OPS571 Operations Management Course website.