Process Design for Riordan
Process Design for Riordan Manufacturing OPS/571 February 18, 2013 Robin Hundley-Solomon Process Design for Riordan Manufacturing Riordan Manufacturing, and its parent company Riordan Industries, Inc. is a Fortune 1000 company (University of Phoenix, 2013). Riordan’s future is focused on remaining profitable while ensuring that financial and human capital is available for continue growth (University of Phoenix, 2013). Remaining financially viable and competitive in the global environment requires the manufacturing plant in China to evaluate current processes and address multiple aspects of the company’s design process.
Primary in the process redesign is the Manufacturing Resource Planning (MRP), the supply chain, accurate forecasting, and a viable implementation process with quality management components. Removing bottlenecks, incorporating Just-in-Time (JIT) inventories, minimizing waste, and including global opportunities will preposition Riordan Manufacturing for continued success. Manufacturing Resource Planning Manufacturing resource planning systems are a common resource in almost all manufacturing plants, large and small.
MRP systems provide an easily understood approach to determining number of parts, materials, and schedules for ordering and production of these components (Chase, Jacobs, & Aquilano, 2006). Because Riordan produces parts in batches using the same equipment, an MRP system will provide an avenue to optimize Riordan’s strategy for decreasing variance and waste in the supply and demand of their electric fans. The plant in China produces the plastic fan blades and fan housings.
The electric fans are purchased from a local plant, shipped to Riordan and assembled to be sold as a finished product. The fan supplier has a 93% rate for on-time deliveries, delaying production if not available. Riordan keeps inventory and safety stock of easily obtained material, which incurs costs. Concern with scrap materials and a reduction in waste is imperative for Riordan’s China plant as it moves to implement new processes. Managing these inefficient processes by the use of an MRP system will reduce raw materials and finished goods inventory costs.
The implementation of the MRP system will meet the goals of providing a master schedule for production, manage inventory levels, automate the ordering process to reduce waste, and reduce variability in supply and demand. These components must be managed effectively if Riordan is to remain competitive in the global market. Process Design The current process of Riordan Manufacturing is not optimal and must be significantly modified to remain a global leader. Because the delivery and supply of electric fans is inconsistent, bottlenecks can occur, delaying production.
Stocking easily obtained polymer products increases inventory costs. Selecting alternative suppliers for fans will enable Riordan to ensure delivery of fans to meet production requirements and customer orders. The use of multiple sources reduces the need to have an inventory of fans. This implementation of a Just-in-time (JIT) inventory management system reduces inventory and storage costs, reduces waste products and improves the manufacturing process. This lean production and process is “based on the logic that nothing will be produced until it is needed” (Chase, Jacobs, & Aquilano, 2006, p. 71). Optimization of strategic capacity planning, inventory management, and the production and scheduling of the products in the right place, at the right time, in the right amount increases revenue and efficiencies for the company (Shields, 1999). The use of flow management, which combines JIT and the capabilities of MRP produces a mix of products based on orders, and using the stream of parts supplied just-in-time (Chase, Jacobs, & Aquilano, 2006). Supply Chain Companies can gain competitive and strategic advantage with an efficient, streamlined supply chain process.
To be cost-efficient companies eliminate non-value-added activities, create the best capacity utilization in production and distribution, and pursue economies of scale (Chase, Jacobs, & Aquilano, 2006). Supply chain management performs the core function of product flow through the process of receiving raw materials to shipment of the final product. The China plant process is currently disjointed, without a central system to oversee receipt, inventory, production numbers, orders, and shipment.
The implementation of a lean process with Just-in-Time inventory, automated accounting of raw materials, orders, invoices, and shipping schedules will minimize paperwork logjams, waste, and bottlenecks. Outsourcing and seeking global opportunities, such as assembly and shipping of the final product, in a location with less costs allows Riordan to focus only on the production of parts. Global product sourcing can help in lowering costs by purchasing the required material from other countries where it is available at low price.
Multi-sourcing of electric fans allows for consistent delivery and competition among providers, also decreasing costs. Production Forecast The plant’s production forecast is based on the theory of moving averages. China’s manufacturing unit takes care of plastic polymers and electric motors required for production of fans. To calculate demands for next year production Riordan averages sales for the last three years. This average is the projection for the coming year (Riordan, 2006). Riordan also produces custom fans based on periodic orders from customers on a year to year basis.
These forecast numbers are inaccurate and unpredictable and can lead to excess inventory and waste. The adoption of the lean process and Just-in-Time inventory is a best practice business strategy and concept to optimize capacity planning, inventory management, and production and scheduling of the products in the market at the optimal times and location. These processes plus the analysis of economic conditions will increase revenue for the company to meet corporate goals. Implementation Plan Adequate planning is necessary for success in the implementation of the new process.
Evaluation at regular intervals with responsive and timely modifications enables Riordan to minimize resource utilization toward non-essential activities. Role definition and clear guidance are key in process design changes and Riordan must delineate carefully its implementation plan. For the JIT training project, it is best to divide the employees into two groups. Group one will start training with the education portion on Monday, February 18 through Wednesday, February 20. Group one can apply this learning in simulation training on the second half of the day on Wednesday, February 20 through Friday, February 22.
The second week starting Monday, February 25 through Friday, March 1 Group one will apply learned knowledge and skills in an actual work setting. Supervisors will be on hand to help and employees can discuss any input, questions, and review any processes with the training supervisors. Group two will begin the education part of the training on Monday, February 25-Wednesday, February 27. Group two will apply this learning in simulation training on the second half of the day on Wednesday, February 27-Friday, March 1.
The second week beginning Monday, March 4 through Friday, March 8, Group two will apply learned knowledge and skills in the actual work setting. Group two will do the same as Group one regarding the provision of input, questions, and review any processes as well. Automation has been added for the JIT process because this is a continuous process. The entirety of the first day is required to go through the receiving and molding processes. This links to the next process of trimming and assembly processes for the next two days. This allows more time to carefully put the products together.
On the fourth day, it links the process to review and check for any product defects and count the excess waste. On the final day, it links with the previous process for packaging, cleanup, and recycle processes. Excess waste can be checked to determine what can be recycled into the raw materials inventory or given to the Chinese partners to dispose of the excess waste. Table one has been added for an illustration of the processes. Table One Cover Letter February 18, 2013 Riordan Manufacturing One Riordan Plaza San Jose, California 95112 Dear CEO:
Team A is honored with the opportunity to introduce the proposal for implementation of Lean production and Total Quality Management (TQM) for improving the Process Design of Riordan Manufacturing. There are various options to track the current operational process in the firm. The selection of the right tools for Lean Production and Quality Management can provide insight regarding the material requirement planning and strategic needs to meet the demands of intermittent orders in addition to the current forecasting based on yearly demand.
The proposal will identify the bottlenecks in the process of forecast demand and production plan, which will achieve the balance needed to satisfy the quantity of Riordan electric fans for the demand. TQM will determine the materials and personnel needed to produce the electric fans according to forecasted demand and assure that Riordan is producing quality products in an efficient manner. This implementation consisting of incorporating TQM, Just-in-Time inventories, minimizing waste, and including global opportunities, helps to extract the results of the project and provides the ability to forecast demand in an optimal way.
Any kind of feedback will be greatly appreciated and any member of our team will readily be available to respond to any questions. Do not hesitate to contact us either by phone or e-mail. The team will readily make any changes you suggest. We look forward to continue working together in the future as Riordan positions itself for continued global success. Sincerely, Learning Team A Conclusion To achieve the objectives of Riordan Industries, it is essential to identify processes requiring modification correctly and successfully implement a new process design.
Optimizing operations require identifying bottlenecks, streamlining the supply chain, implementing JIT inventory management, and maximizing profits while increasing customer satisfaction is imperative. Aggregate planning and total quality management assists in keeping Riordan Industries China plant on track and positions Riordan for continued success as a global leader. References Chase, R. B. , Jacobs, F. R. , & Aquilano, N. J. (2006). Operations management for competitive advantage (11th ed. . New York, NY: McGraw Hill/Irwin. Retrieved from the University of Phoenix ebook Collection database. Shields, T. (1999). Tutorials-lean production/lean manufacturing. Defense Acquisition University. Retrieved from http://www. dau. mil/educdept/mm_dept_resources/navbar/lean/ 01rdg-lean. asp. University of Phoenix (2009). Riordan manufacturing virtual organization. Retrieved from Apollo Group, Inc. , OPS571- Operations Management.
