Production Plan for Riordan Manufacturing The intended principle of this study is to submit suggestions for a new process design and the supply chain at Riordan Manufacturing, Inc. The reformation will utilize the theory of Lean Production in the application of the electric fans manufacturing. The research uses Riordan Manufacturing, Inc. intranet information. This paper will present a complete production plan for two of the Riordan Manufacturing Inc. locations: Hangzhou, China and Pontiac, MI.
Riordan’s plant in Hangzhou, China specializes in the plastic fan blades and fan housings, and the Pontiac, Michigan location provides the customized look and design of the fans. The research of Riordan’s China plant exposed obstacles to the effectiveness of process design and supply chain. By making cuts in their inventory costs, improving outsourcing and their supply chain should benefit Riordan. The purpose of the modified process design and supply chain will help reduce the design and delivery time by subcontracting its limited activities to a third party.
The relocation of Hangzhou’s plant operations to Shanghai will minimize shipping costs and reduce stocking of the inventory. The application of the Theory of Constraints will modify the process into a strategic plan. The proper implementation of the Lean Production Current Production Process The Hangzhou, China plant uses a make-to-order fabrication process selection strategy when manufacturing the electric fans. Currently the plant makes fans utilizing a batch production process to allow the fans to be made specifically to the consumer’s needs.
Useful reports about the industry propose that Riordan Manufacturing should move to a more aggressive process design system to meet the anticipated increased demand and to gain more market share. Safety stock will support a just-in-time (JIT) delivery process to reduce delays that are external to the business such as concerns with work stoppages and working conditions as global plants can experience. The new process design system would include maintaining electric fan capacity reflective of competitor sales performance, and based on the product demand throughout Asia and Europe.
The process flow structure would be changed to an assembly line infrastructure to support increased operations and sales. An assembly model would also encompass customer specific orders in addition to safety stock and current inventory requirements. New Supply Chain Design Because the polymer material is more abundant, obtained locally, and has no availability or delivery issues, the China plant will shift the contents of its inventory to house more fan motors.
Riordan will adopt a pull system to only purchase the polymer required for the daily requirements of fans and housings, which will provide additional storage space for more critical inventory. Possessing a safety stock of electric motors will prevent a slowdown in Riordan’s manufacturing process, eliminating one of the main bottlenecks in the value stream. To achieve this efficiency, Riordan will periodically place orders with a second motor supplier so that Riordan can begin a new two-bin system. In a two-bin system, items are used from one bin, and the second bin provides an amount large enough to ensure that the stock can be replenished,” (Chase et al. , 2006, p. 609). The first bin will contain electric motors for production orders to satisfy customer requirements, the second will be appropriated a safety stock that will provide the ability for consistent production runs. New Custom Orders Process To facilitate custom manufacturing of fans, Hangzhou will offload this portion of their business to the Riordan plant in Michigan (MI).
This move will take advantage of the mass customization capabilities at the MI plant. Mass customization is highly effective when differentiating a product for specific customer requirements until the latest point in the supply chain (Chase et al. , 2006). The MI plant is capable of customizing the fan design, the color of the finished part, and the new fan blade dies required per customer specifications. This move from Hangzhou to MI allows customization without disrupting the flow of material and allowing customers in North America to customize their products.
The custom designs will incorporate standard fastening details, which are common to Riordan fans. Standardized parts would save the company money through volume discounts and would eliminate waste from excess inventory of different fasteners. Once the customer decides to purchase a significant quantity of fans, Hangzhou will start the production process in China where polymer is more abundant and labor is less expensive. New Logistics Process
Although Riordan has used a few different companies for its shipping needs, the company will benefit by taking a different approach, which will increase operational efficiency and competitive advantage. Certainly one area of concern is the less than optimal on-time delivery performance average of 93%, which affects negatively on the Riordan brand and customer satisfaction. Riordan will outsource its logistical requirements to the most qualified marketing partners. Outsourcing is the act of moving some of a firm’s internal activities and decision responsibilities to outside providers. ” Riordan will maintain its core competencies in-house, including the intellectual property of manufacturing high performance fans and outsource other logistical “non-proprietary” standardized processes. Riordan will use logistic design concepts to ensure that fan materials, engineering, and design produce a product that meets desirable package sizes and weights (Chase, Jacobs, Aquilano, 2006).
This design approach will ensure that regardless of the transportation mode selected (trucking, rail, water, or air), the customer will benefit from reduced shipping charges. In addition, Riordan will explore the best type of robust packaging that will produce damage free transport of the product to the customer. (Chase, Jacobs, Aquilano, 2006). Ultimately, by outsourcing logistical efforts to well established technology driven-partners, Riordan’s can provide additional value to the customer. Logistics companies now have complex computer tracking technology that reduces the risk in transportation and allows the logistics company to add more value to the firm that it could if the function were performed in-house” (Chase, Jacobs, Aquilano, 2006, p. 414). Conclusion (Danielle Garcia 200 words) Compile and run through plagiarism (Danielle Garcia) References Chase, R. B. , Jacobs, F. R. , & Aquilano, N. J. (2006). Operations Management for Competitive Advantage (11th ed). New York, McGraw Hill/Irwin.