Week5

Riordan Production Plan Tasia, Conway, Anniebell Hanna, Fernando Hurtado, Vilis Yore OPS/571 June 25, 2012 Christine Becker Riordan Riordan Manufacturing is a global plastics manufacturer and industry leader in the field of plastic injection molding with locations in Georgia, Michigan, California, and their most current expansion in 2000 to Hangzhou, China (University of Phoenix, 2012). The plant located in China manufactures fans using a make-to-stock operation that uses a forecasting method to determine future demand. An evaluation conducted by Team A of their strategic capacity planning and lean production for their new process design and supply chain process for the electric fans will address supply chain issues. Strategy Capacity Planning According with Chase, et al (2005) a capacity planning is an approach for determining the overall all capacity level of capital intensive resources, including facilities, equipment, and overall labor force size that support company’s objective and goals. Capacity planning is usually done in short range, medium range, and long range and it is measure by the utilization rate which determines how close firm is operating relative to its designed capacity. To determinate the real capacity that Riordan needs, it is important to determinate the forecast of sales for the electric fans. According with the information issue, Riordan is aiming to achieve a target of $50 millions in revenue. These amounts translate in units will determinate the amount of products that have to produce in our China’s plant. Besides using a MRP plan we can determine the needs of raw materials, sub-assemblies, and other that form the level of inventory that support Riordan’s production. Comparing the current capacity with the forecast units will identify if our plant is in capacity of not to produce the unit. Without a capacity plan the company could not achieve their marketing goals, therefore Riordan will not achieve their main goals of profitability to assure that the financial and human capital would be available for sustained growth. If these plans are not achieve as it is the plan, the company will lose customers. One of the options could be outsourcing part of the product to other companies, as is for the Pyramid Bottle Project with a French company. Riordan needs to identify all possible problem that will affect their capacity using method that maximize the productivity of the plant, like identifying bottlenecks, using JIT to the manufacturing process and inventory control., using techniques of Six Sigma or Lean Manufacturing. Productive initiatives are reduce product costs through process improvement, develop and deliver quality products roadmap on time through VSM analysis, develop ERP tools that reduce cost by 10%, drive on time to market through commitments with improved quality products, and all process must be record in a progress Score Card. At the end, all the techniques and process have to be oriented to achieve the production strategy plan. Lean Production Since Riodan is already on the leading edge when it comes to Six Sigma and ISO 9000 the company is also familiar with the practices of Lean production. (University of Phoenix, 2012). Once Riodan has identified all of the possible problems that keep the company for producing at maximum capacity will use established six sigma practices to find the core of these issues. When the issues are worked through in various projects and it is time to recommend process updates one of the recommendations is that Riordan use the Kanban Production Control System. Kanban means “sign” or “Instruction card” in Japanese. The specific types of control systems Riordan should use would be the use of Kanban container system. The use of Kanban container system requires that the factory floor have outlines of the amount of product that needs to be produced during a certain period. Empty containers are placed on the work floor and produced parts set here as a way to keep track of inventory. Once that empty space is filled no more of that product should be produced. This system could also be used as a stopping point in a process. Once the amount of a specific part has been produced then the next shift can take those parts to continue making the product. If there are multiple lines creating parts for same object those parts can be transferred to another area. Supply Chain Riordan Manufacturing China Plant is responsible for producing, assembling, providing storage, and supplying Riordan Manufacturing and the consumers with Electric Fans. Riordan China Plant has begun to design and develop customized fan products for consumers worldwide. The customization of the electric fan products are under individual consumers’ contracts because it is a specialized product requested by the consumer. Therefore, Riordan supply chain process must be effective, and accurate to guarantee success for the supply and demand of electric fans for consumers. Riordan transferring the supply chain process into an innovative process with effective scheduling, on-time deliveries, and market entry can help the organization gain a competitive advantage in today’s global market. Riordan Manufacturing have plants in different regions of the nation, and one plant in China outsourcing to other countries globally can be utilized to save the company money, and improving the supply chain process for the organizations, and consumers. Outsourcing to experts can allow the business to focus on other aspects of Riordan, and the external experts contracted for outsourcing can focus on the supply chain process of Riordan manufacturing China Plant. Therefore, the China plant inventory management system will be improved, and the on-time deliveries will become accurate to gain consumer satisfaction. A procurement process in Riordan Chain Plant can focus on the quality of the resources for the product to make sure the materials are coming from reliable safe source. Continually tracking the inventory requirements for quality will provide Riordan with quality and quantity with the electric fans better to serve consumers with product selection, and on-time deliveries. Conclusion Riordan Manufacturing Plant can continue on their path of being six sigma driven due to the philosophy that raw materials needed will be based on the demand of its customers (Chase, Jacobs, & Aquilano, 2010, p. 471). Total quality control and profitable return on investment will be achieved. References Chase, R. B., Jacobs, F. R., & Aquilano, N. J. (2006). Operations management for competative advantage (11th ed.). New York, NY: McGrawHill/Irwin. University of Phoenix. (2012). Riordan Manufacturing Scenario. Retrieved from https://ecampus.phoenix.edu/secure/aapd/cist/vop/Business/Riordan/index.asp