Running head: PRODUCTION PLAN FOR RIORDAN MANUFACTURING Production Plan for Riordan Manufacturing University of Phoenix Online OPS 571: Operations Management December 21, 2009 Production Plan for Riordan Manufacturing Introduction Riordan Manufacturing, Inc. is a global leader in the field of plastic injection molding with state of the art design capabilities that has made the company competitive in the global market. Riordan has three operating entities in Georgia, Michigan and California plus a joint venture in the People’s Republic of China.
Riordan expanded production and design of electric fans to an overseas operation plant in Hangzhou, China. The China plant is a decentralized unit that schedules production of electric fans to meet the forecasted sales. The current supply chain process in place is not efficient. Riordan Manufacturing will need a strategic capacity plan, which will provide an approach for determining the capacity level of capital-intensive resources—facilities, equipment, and overall labor force size—that best supports the company’s long-range competitive strategy (Chase, Jacobs, & Aquilano, 2006).
The goal is to provide an efficient and effective new process design and supply chain process for the electric fans at Riordan. Strategic Capacity Planning It is essential that Riordan Manufacturing develop a well-designed strategic capacity plan in order to ensure that the business is profitable and produces the electric fans in a cost-effective manner. The success of a supply chain lies in good strategic and tactical planning and monitoring at the operational level. Strategic planning is long-term planning and usually involves selecting providers and distributors, location and capacity planning of manufacturing/servicing units, among others. In the context of supply chain design we usually consider two aspects in the selection of partners: the qualitative aspect and the quantitative aspect. The qualitative aspects are the primary selection criteria, such as the financial position of the partner, quality policy, previous history, adaptability towards change of product type or market situations” Chauhan, Nagiz, & Proth, 2004).
Inaccuracy in the strategic capacity plan may cost Riordan business by the potential loss of its customers to competitors due to poor service or it may result in Riordan being less profitable due to excessive inventory (Chase, Jacobs, & Aquilano, 2006). If riordan were to consider outsourcing aspects of their processes this may aid in the reduction of overall cost and lead time. Riodan needs to implement a strategic capacity plan that considers the customer requirements. Lean Production Lean production requires seven accomplishments.
According to chapter 12 the required steps are design flow process, total quality control, stabilize schedule, Kankan pull, work with vendors, reduce inventory more, and improve product design (Chase, Jacobs, & Aquilano, 2006). The layout of this system for Riordan Manufacturing will require all special order fans to either deceases or be at a minimum. With regard to lean product the goal is to “achieve high-volume production using minimal inventories“(Chase, Jacobs, & Aquilano, 2006), and with special orders they require several raw materials based upon the customers request.
If Riordan were to take upon a lean production stance they will be able to work with its supplies so they will not have to order as much safety stock, improve excess material, and better streamline the custom order process. With the many different ways to achieve lean production the most beneficial for Riordan would be level the facility load. With this type of lean production the new process can “synchronize production with demand” (Chase, Jacobs, & Aquilano, 2006). This will aid in avoid the delay in which customers have to wait for their product, which will ultimately fix the shipping problems that some of the plants have issues with.
Supply Chain Process “Supply chain comes from a picture of how organizations are linked together as viewed from a particular company,” (Aquilano, Chase, & Jacobs, 2006, p. 406). The supply chain process that’s utilized by the China Plant has resulted in a 93% delivery rate. The China facility prepares its own sales forecast and schedules production based on the sales forecast. The production of fans is based on sales generated over a 3 year time period. Riordan maintains a set amount of electric motors, and fans as inventory. The efficiency of the supply chain can be measured based on the size of the inventory investment in the supply chain,” (Aquilano, Chase, & Jacobs, 2006, p. 408). Stocks of inventory are held in stockrooms in order to fulfill the various demands of the customer base. The supply chain process at Riordan Manufacturing is one that needs improvements in order to minimize cost and increase the rate of delivery. Utilizing the continuous replenishment strategy, Riordan will be able to establish EDI links with buyers.
Through the use of this strategy the Buyer will inform Riordan on the demand for a particular product then Riordan will be able to determine future forecast demands, and determine which product requires replenishment rather than basing fan sales on prior sales forecasts. Conclusion References Chase, R. B. , Jacobs, F. R. , & Aquilano, N. J. (2005). Operations Management for Competitive Advantage (11th ed. ). New York: McGraw-Hill/Irwin. Retrieved November 24, 2009, from University of Phoenix, rEsource, OPS571-Operations Management Course Web site.
University of Phoenix. (2004). Riordan manufacturing virtual organization [Computer Software]. Retrieved November 24, 2009, from University of Phoenix, rEsource, Simulation, OPS571 -Operations Management Course Web site. Chauhan, S. S. , Nagiz, R. , & Proth, J. M. (2004). Strategic capacity planning in supply chain design for a new market opportunity (Vol. 42, No. 11, 2197–2206). International Journal of Production Research ISSN 0020–7543 print/ISSN 1366–588X online, Taylor & Francis Ltd. http://www. tandf. co. uk/journals. DOI: 10. 1080/0020754042000197711