This paper discusses the proposal package for Riordan, which handles each step of electric fans from inception to production. The paper also includes the material requirement-planning phase of fans being manufactured at the China Plant. An analysis of the existing production process of the Riordan electric fans provides the basic outline for designing the new process to remove bottlenecks. In addition, the production forecast for the Riordan electric fans, and the Lean Production implementation plan is discussed. The cover letter describes the coordination of aggregate operations planning and suggested TQM process to define the strategic objective of the company.
The China plant of Riordan Manufacturing is the production unit, which applies material requirement planning to meet the time-phased requirement of material for assembled units or fan production operations. Raw materials are collected at receiving departments, which are then processed to make it suitable for molding departments. The molded unit acts as input for the trimming department, which can be selectively used for creating additional parts. The trimmed parts are assembled in the assembly department to create higher components and these components are handled in the packaging department. The shipping department supplies the packaged units of electric fans for distribution unit. (University of Phoenix, 2009). There is need of minimizing the waste products from each operational unit to reduce the cost of fan production.
The manufacturing unit in Hangzhou, China uses these spare parts to create customized products. There are issues in achieving the periodic orders to supply the number of fans as the production plan is based on yearly demand of electric fans. The lack of definite pattern in ordering leaves a gap in projecting the exact material requirement on the short notice. The management team of company is concentrating on the optimization strategy to improve the process of MRP based on process variability involved in the supply, demand, and production of Riordan electric fans.
Recommended New Process Design
Within any company, there may be issues/problems that come into effect. Based on some of the issues Riordan Manufacturing is facing, it is evident that their management team is failing to strategically implement new innovative ideas, thus providing reasons why the company is losing social communication within their departments. If the company’s employees socially interact with each other on a professional level, they could provide a better analysis and develop new processes. In order to help the company resolve some of their issues, a recommended new process design for the production of the Riordan electric fans is considered. Their new process design should include an MRP (material requirement planning) process. Riordan should consider an MRP because having an MRP would better supply an assembly line production.
As per example: When it comes to different sections within the company such as machine, packaging and products departments, the company should make sure that each package has the proper labeling. The last thing the company wants to go through is having their packages shipped to the wrong distribution center. Therefore, it is essential to label packages properly. Riordan Manufacturing must revise their capacity planning (2006) because this would help the company to achieve their goals. Because Riordan is a company that produces different products, capacity planning would help management manage company expenses. If the company does not manage their costs/expenses effectively, the results may be a loss of profits, customers, and staff. Capacity is an essential company requirement which will allow management to understand what it takes to operate the company’s machinery. Capacity planning will increase production quality, which would be highly profitable to the company.
The supply chain process can concentrate on inventory management process in the system to fulfill the order requested (Chase, 2006). Riordan focuses on management of inventory from raw material to completion of finished product. The supply chain is necessary for tracking the quality and need of inventory in timely manner to extract optimum performance from supply-chain process. The supply-chain network should be well connected in identifying the adequate supply of materials for production of electric fans as well as forecasting the future production sales (Chase, et al, 2006). The categorization of product helps in ordering the right amount of parts from the concerned supplier.
The improvement in measurement process is deciding factor in raising the customer satisfaction index with sufficient cost reduction, which is the primary objective of the Riordan business strategy. By effectively managing, designing, and planning supply chain activities (such as company information, materials, and services), Riordan Manufacturing will benefit. To better expedite potential/future supply chain advantages, Riordan needs to focus on all business aspects of their supply chain, not just solely based on inventory, but also product development, and/or customer service management.
In addition to taking advantage of any global opportunities, Riordan Manufacturing should research and see what types of locations, traders, and consumers they may have available. The company should also review the different types of market conditions they currently have.
Riordan Manufacturing needs to use production forecasting to make periodic decisions involving process selection, capacity planning, and facility layout as well as for continual decisions about production planning, scheduling, and inventory. When forecasting, Riordan Manufacturing need to use two or three forecasting methods and asking questions such as how the general economy affect the forecast, how the changes in industrial and private consumer behaviors affect the economy and will there be a shortage of essential complementary items. The recommendation for Riordan Manufacturing is to use Time Series forecasting model. This model predicts the future based on the past data. For instance, Sales figures collected in the past six weeks can be used to forecast for the seventh week and quarterly sales figures collected in the past several years can be used to forecast future quarters.
According to Chase, Jacobs, & Aquilano (2006), consider the following factors: 1) Time horizon to forecast 2) Data Availability 3) Accuracy required 4) Size of forecasting budget 5) Availability of qualified personal, the recommendation is to use Simple Moving Average model. When demand for a product is neither growing nor declining rapidly, and if it does not have seasonal characteristics, a moving average can be useful in removing the random fluctuations for forecasting (p, 518). The main disadvantage in calculating a moving average is that all individual elements must be carried as data because a new forecast period involves adding new data and dropping the earliest data (Chase, Jacobs, & Aquilano, 2006).
Plan for Lean Production can be implemented in two phases. First phase will be called phase one which is duration of implementation for the project. The project will be divided into four tasks. Task 1 will consist of team formation and top management approval with basic outline for project and definition of roles and responsibilities for the implementation of project, scheduled for August 23, 2010 to August 27, 2010. Task 2 scheduled for August 30, 2010 to September 3, 2010 will consist of a selection of tools for implementation of the project, which will be used, in Phase 2. Training on tools and requirement gathering for the lean production in China plant is scheduled for September 7, 2010 and October 7, 2010. Task 3 consists of actual implementation of Lean production applying JIT from October 8, 2010 to November 8, 2010.
Total quality management process or Task 4 is the duration of quality control and troubleshooting in production support. Project B is the actual implementation of Lean Production in the China Manufacturing plant on the entire system. Project B will follow the same process used for project A. Task B1 will be the extension of real production environment, which will require a training workshop scheduled September 1, 2010 to September 8, 2010. Task B2 is the implementation of functionality using JIT system from November 15, 2010 December 15, 2010. Task B3 of TQM and maintenance is scheduled for January 3, 2011 and January 17, 2011 as show below on the Gantt charts:
The proposal for Riordan is thorough in detail, describing steps to make the company more cost-effective and to update production phases. The proposal includes material requirement planning as well as an extensive analysis of the suggested new process. Reevaluating the supply chain management will benefit the company, as execution of the new model is necessary. Riordan is a major player in the industry, and the company needs to take advantage of opportunities that can only come to fruition with major changes within the organization; and the implementation of these recommendations can help Riordan grow and prosper.
Chase, R. B., Jacobs, F.R., & Aquilano, N.J. (2006) Operations Management for Competitive
Advantage, 11th ed. New York: McGraw Hill/Irwin
University of Phoenix. (2005). Riordan Manufacturing. Retrieved August 5, 2010, from University of Phoenix, week four, OPS/571 Operations Management Course website.