Riordan Manufacturing Supply Chain Design

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Riordan Manufacturing Supply Chain Design
Shante Moore
University of Phoenix/OPS 571

Riordan Manufacturing is a global plastics manufacturer and industry leader in the field of plastic injection molding with locations in Georgia, Michigan, California, and their most current expansion in 2000 to Hangzhou, China. The plant located in China manufactures fans using a make-to-stock operation that uses a forecasting method to determine future demand. A review of their strategic capacity planning and lean production for their new process design and supply chain process for the electric fans will address bottleneck and supply chain issues. Also outlined are the details of new processes and how the benefit the company. Forecasting

The demand for fans is forecasted based on taking the average of sales for the last three years and extrapolating it into the following year. This forecasting method assumes history will repeat itself within manageable limits. “The objective of strategic capacity planning is to provide an approach for determining the overall 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, 2005 p.430) There are several ways to improve this current method of operation. First, the forecasting should include customer demand in order to minimize waste. One of the requirements for determining capacity is to use forecasting techniques to predict sales for individual products. “Time Series analysis is based on the idea that data relating to past demand can be used to predict future. Past data may include several components, such as trend, seasonal, or cyclical influences.” (Chase, Jacobs, & Aquilano, 2005 p.518) The future demand for fans should be based on time series analysis using monthly sales trends. Ordering System

The China plant manufactures both basic electric fans and custom order electric fan for customers worldwide. Forecast for the basic fans are based on the average sales from the past three years, while estimates for custom order fans are not forecasted but are based on the customer’s estimated yearly requirements. An issue arises when periodic an order for fans against the contracted yearly total is received randomly and at varying quantities throughout the year. This makes it difficult for the plant to stock materials required in the short term. Another problem is the company supplying the motors for the fans. Their on time delivery rate is only 93%. This leads to a bottleneck in manufacturing. A solution for these problems is to implement an effective ordering system or process. In order to improve the 7% lag time a second motor supplier could be used to fill the gap. There should be a maximum amount of units per month, and a specified date the units are needed. For custom orders, a specific date or deadline should be a requirement and included in the contract. Setting these specific guidelines in the plants’ ordering system will improve the 7% lag time in deliveries. Lean Production

When the bottlenecks in a process are exposed there is a strong correlation between a strategic capacity plan and lean production. When Riordan implements a new process, lean production can be achieved. More can be accomplished efficiently in less time due to a continuous production flow (Kotelnikov, V., n.d.). The new ordering system will allow for all products needed to be available just-in-time to begin production. Eventually, as a more specialized cross-functional team is developed, the integration of the value chain is able to offer quality work to produce electric fans and distribute to their buyers worldwide. As the cross-functional team operates effectively group technology becomes the leading force to eliminate waste because more precise measures are being performed (Chase, Jacobs, & Aquilano, 2010, p. 473). Cross-Functional Team

A cross-functional...
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