February 18, 2013
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. 471). 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...