Process Design for Riordan Manufacturing
January 24, 2011
Riordan Manufacturing produces electric fans out of its plant in China. This proposal package will discuss the process design, which will concentrate on all of the cycles of manufacturing the electrical fans. This proposal will also cover how to use supply chain concepts to eliminate bottlenecks to effectively meet demands of customers. Also this proposal will discuss production forecasting and the implementation plan of lean production using Gantt Charts. Finally we have added a cover letter which covers aggregate operations planning and Total Quality Management (TQM). Material Requirement Planning
Material Requirement Planning (MRP) is a “computerized ordering and scheduling system for manufacturing and fabrication industries, it uses bill of materials data, inventory data, and master production schedule to project what material is required, when, and in what quantity” (Business Dictionary.com, 2010, np).
There are three objectives to the MRP system and they are: a guarantee of product and material availability to Riordan customers, that there is a low level of inventory, and plan for on-time delivery schedules and purchasing. The MRP system will have control, bill of material processing and easy scheduling. Currently, Riordan is manually recording the materials they receive from their local distributor. By manually recording everything, items can be miscounted or missed completely. This can result in bottlenecks as areas run out of parts.
By implementing a master production schedule (MPS) into their China plant, Riordan can keep track of what parts are needed for each specific fan and how many labor hours it takes to produce that specific plan. The MPS would also help them match their supply and demand levels by allowing them to input forecasts or actual order totals into the system to generate resource requirements and due dates of specific orders. By being able to input their due dates, they will be able to schedule their workloads according to the criticality of the order. This will also help them improve their delivery times as they will be able to complete their orders in a timely fashion. New Process Design & Supply Chain Management
The electric motors used in the fans are completely assembled and bought by buyers of Riordan from a local Chinese company. The issue lies in the fact that on-time deliveries for these motors are only at 93%. We suggest that the China plant look into acquiring an additional manufacturer of these motors. Doing this will help increase the percentage of deliveries and also indirectly increase competitiveness between suppliers. This will benefit Riordan by ensuring the electric motors will be in stock and could possibly help them get better prices from the suppliers as a result of adding a new supplier. Another improvement to Riordan’s process is to implement a safety stock for certain inventories. Running out of motors will cause a bottleneck and is something that can be avoided with adding a safety stock of motors. Implementing this comes with a price however. Inventory costs will go up for Riordan. To offset this cost increase we suggest Riordan lower the stock of the plastic polymer they have. The reason for this is that the plastic polymers used for the fans can be found in many local suppliers’ stores and therefore is easily accessible. This will allow Riordan to reduce the plastic’s stock and increase the motor’s stock. A third suggestion we believe will help improve the process is to establish a kaizen event where lean improvements can be discussed. This will provide the forum for which improvements and waste eliminations can be adequately examined and improved upon. The last suggestion Team B has is the most drastic one. Currently Riordan’s China plant molds and sculpts the plastic polymers into what they desire. This is the type of...
References: Apollo Group Inc. (2004). Riordan Manufacturing Virtual Organization [Computer Software]. Retrieved from University of Phoenix, Simulation, OPS 571 website.
Business Dictionary.com (2010). Material requirements planning (MRP/MRP-I). Retrieved from http://www.businessdictionary.com/definition/material requirements planning-MRPMRP-I.html
Chase, R. B., Jacobs, F. R., & Aquilano, N. J. (2006). Operations Management for Competitive Advantage. Retrieved from http://www.ecampus.phoenix.edu.
Imaoka, Zenjiro, (2005), Understand Supply Chain Management through 100 words 3rd edition. Retrieved from http://www.lean-manufacturing-japan.com/scm terminology/mts-make-to-stock.html, on January 23, 2011.
Lean Manufacturing (2004). SiliconeFarEast.com. Retrieved from http://www.siliconfareast.com/lean-manufacturing.htm.
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