Process Design for Riordan Manufacturing

Topics: Inventory, Supply chain management, Manufacturing Pages: 5 (1510 words) Published: November 17, 2010

Process Design for Riordan Manufacturing
International Operations Management

Process Design for Riordan Manufacturing
Riordan manufacturing in San Jose, California, is the leading manufacturer in plastic injection molding. The company also has facilities in Albany, Georgia, Michigan, Pontiac and Hangzhou, China. This paper is to present a production process design proposal for the electric fans until it arrives at to the final consumer. Riordan materials resource planning system

The plant in China operates as a decentralized unit of Riordan Manufacturing. The electric fan parts are sourced locally and they also purchase polymers, which are molded to created individual parts needed for the fans. Sales are forecasted based on customer yearly requirements, therefore the plant estimates the materials that may be needed. This does not give the plant a clear picture of the materials that will be required and production is not planned on a proper forecast. This creates a shortage or surplus of materials, creating a back log of orders or a waste of materials because of overstock. Receiving Process – The current receiving process is inefficient and has room for error. One person is responsible for checking the delivery of raw materials and writing a paper report on the type, quantity, and condition of all materials received. At the end of the day the paper report is given to another person to in put the data manually into the computer system. Inventory Management – Once a year a physical inventory is performed to check if the amount of raw material reconciles with the number of finished and partially assembled products. In an effort to deliver finished goods in a timely manner, each plant carries overstock of the most popular products. Order Fulfillment – Management seems to have a caviler attitude toward fulfillment that has filtered down through all levels of staff. Orders are taken by the sales team who is responsible for entering the customer’s billing and shipping information into the system. The order is sent to the warehouse, fulfilled and is shipped to the customer by truck. Analysis of factors and Risks at Hangzhou, China Facility

Receiving Process – The process of receiving inventory into the system is delayed by the end of the day creating a risk of inventory being misplaced, stolen, misused or, entered incorrectly. There needs to be a separation of duties; the supervisor cannot verify the receipt after the receiving clerk has counted physically and entered the data into the company system. Inventory Management – Riordan should establish control standards and procedures to ensure that assets are protected and properly used. All employees are responsible for maintaining compliance of control activities Order Fulfillment –The current ordering system lacks an authorization and reconciliation process. The company risks cost of replacing products that were said to be delivered and the inability to fulfill orders on time due to the shortage of materials New Process Design for Production of Riordan electric fans

Riordan Manufacturing's China plant’s operations focus is on quantity when it comes to the production of the fans. The necessary amount of inventory is maintained according to a production forecast. Nonetheless, the amount of inventory is inadequately measured because only 93% of deliveries are in a timely manner. As such, Riordan should seek substitute manufacturers in addition to its current unit in order to have an adequate amount of inventory so production will not be delayed; this would help the company schedule and deliver more efficiently. Riordan should additionally keep more inventories in its units; however, this will increase the company’s inventory cost. This cost can be minimized by reducing the amount of plastic polymer in its inventory since it is easily obtainable. Additionally, Riordan will need to update...
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