Process Design for Riordan Manufacturing Riordan Manufacturing is an industry leader in plastic injection molding. State-of-the art design capabilities, and creative innovative plastic designs; have earned the Riordan international acclaim (University of Phoenix, 2006). Riordan Manufacturing is planning to implement a new process for its electronic fan manufacturing. This process was created employing capacity planning to ensure the optimization of resources. Riordan will be able to eliminate bottlenecks within the inventory and pass on savings to the customer.
The gains from efficiency will ensure Riordan’s competitive advantage. The enclosed proposal package for Riordan Manufacturing will include; a cover letter detailing how Riordan can coordinate Aggregate operations planning and TQM for their electric fans, MRP, New Process Design, Supply Chain, Production Forecast, and an Implementation plan including a Gantt chart. Cover Letter August 18, 2011 Team A PO Box 1234 Troy, MI 48076 Dear Dr. Riordan, “The aggregate operations plan is concerned with setting production rates by Product group or other broad categories for the intermediate term (3 to 18 months)” (Chase, 2006).
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The goal over the next 18 months is to develop a system that will allow for the production of Riordan electric and personalized fans; offered at their China location, to become a more stream line process and adopt more of a just-in-time manufacturing approach. “The aggregate plan precedes the master schedule. The main purpose of the aggregate plan is to specify the optimal combination of production rate, workforce level, and inventory on hand” (Chase, 2006). Production rate refers to the number of units completed per unit of time (such as per hour or per day).
Workforce level is the number of workers needed for production (production = production rate ? workforce level). A new process plan for implementation and improving the Process Design of Riordan Manufacturing is enclosed. Material Resource Planning (MRP) Through the years, manufacturing resource planning (MRP) has evolved to become a staple in successful operations management. While initially only designed to forecast materials required for production, the growth of computer programs has allowed the system to expand immensely and includes both materials and resources planning.
MRP systems currently encompass the entire manufacturing process from order entry to production scheduling. MRP is a logical approach that addresses the problem of determining the type and quantity of materials needed for Riordan Manufacturing to efficiently produce their standard electric fans. This type of system, however, is not applicable for manufacturing of their custom designed fan. MRP provides the most value to industries that produce a large number of the same products and is suitable for Riordan’s current assemble-to-stock operation (Chase, Jacobs & Aquilano, 2006).
Because Model X is the most commonly produced fan, the following example outlines a sample MRP for manufacturing 100 of the Model X standard fan. Model X fan consists of five parts total. This particular model is made of two of part number one and three of part number two. Part one is made up of one of part number three and two of part numbers four. Part number two is made of two part number three and two of part number five. The quantity of material needed for production of Model X is outlined in Table 1. 1.
Next, Table 1. 2 outlines the Riordan Material Requirements Plan that includes factoring of lead times. Table 1. 1 Quantity of Parts Needed for Production of Model X Part Number | Equation| Calculation| Quantity Needed| Part # One| 2 x number of Model X| 2 x 100| 200| Part # Two| 3 x number of Model X| 3 x 100| 300| Part # Three| 1 x number of Part One+2 x number of Part Two| 1 x 200+ 2 x 300| 800| Part # Four| 2 x number of Part One| 2 X 200| 400| Part # Five| 2 x number of Part Two| 2 x 300| 600|
Table 1. 2 Riordan Material Requirements Plan | | | | | | | | | | Part Number| | WeekOne| WeekTwo| Week Three| Week Four| Week Five| Week Six| Week Seven| Lead Time| Model X Fan| Required Date| | | | | | | 100| One Week| | Order Placement| | | | | | 100| | One Week| One| Required Date| | | | | | 200| | TwoWeeks | | Order Placement| | | | 200| | | | TwoWeeks| Two| Required Date| | | | | | 300| | TwoWeeks| | Order Placement| | | | 300| | | | TwoWeeks| Three| Required Date| | | | 800| | | | Three Weeks| Order Placement| 800| | | | | | | ThreeWeeks| Four| Required Date| | | | 400| | | | OneWeek| | Order Placement| | | 400| | | | | One Week| Five| Required Date| | | | 600| | | | One Week| | Order Placement| | | 600| | | | | One Week| New Process Design Supply Chain Management Supply chain management is the idea to apply a total systems approach to managing the entire flow of information, materials, and services from raw materials suppliers through factories and warehouses to the end customer (Chase & Jacobs, 2006).
After a thorough analysis of the supply chain process Riordan Manufacturing has decided to make a major adjustment by becoming virtually paperless. Automating the process will reduce human error, decrease the likelihood of losing documentation, increase productivity and reduce costs. The process is as follows: 1. Riordan’s R & D Department contacts the shipping company being used to make the shipment going to the China plant, usually FedEx. 2. The goods are picked up by FedEx. 3. Before the pickup FedEx is e-mailed all crucial information about the products being shipped.
The United States Bureau of Export Administration (BXA) receives all of the information as well. The China Plant also electronically receives the shipping information. 4. The shipment is delivered by FedEx to a customs broker at a United States sea port. The cargo is scanned using a handheld scanning device, such as the Motorola MC75, an electronic notification is sent, including all of the shipment details and arrival time, to FedEx in China. This location will begin to prepare to receive the cargo upon arrival. 5.
The Broker takes possession of the cargo; all customs documentation is electronically signed and uploaded to the U. S. Customers for clearance, to the Broker, and the China Plant. 6. Any dock fees are paid by the Broker, along with any other occurred fees. The fees are submitted to Riordan’s R&D Department once all duties are fulfilled. 7. A company is hired by the Broker to move the cargo to the dock area alongside the ship. The shipping documentation is scanned at arrival. An electronic notification, including the shipping information, is transferred to the customs office at the destination port ahead of time.
The R & D Facility is billed monthly for all shipping charges. 8. The ship arrives at its planned destination. 9. Chinese Customs examines the cargo if no problems are found releases it to the Broker. The cargo is unloaded after approval. Customs receives the notification before the product arrives to quicken the approval. Unloading begins immediately while the broker accepts the cargo and uploads all electronic documents. Approval of the cargo is sent to the headquarters of Riordan and FedEx. The Broker pays any additional dock fees. 10.
FedEx accepts the cargo, electronically receives the cargo using the Broker’s Motorola handheld, and then delivers the cargo to the China Plant. FedEx uploads all of the information electronically for its records. 11. When the delivery has been received, the China Plant examines the shipment, checks for damage, the shipment is accepted, and signs off on the delivery using the handheld. An electronic copy of the receipt is sent to Riordan‘s main office, to FedEx, and the China Plant. The China Plant is fully equipped to further production of the electric fans at Riordan.
Using this location also reduces the cost of labor, increasing profits. Production Forecast Forecasting is a vital component to operating successfully in every area of business. As noted by Chase, et al. (2006) “Production and operations personnel use forecasting to make periodic decisions involving process selection, capacity planning and facility layout as well as for continual decisions about production planning and inventory” (p. 512). Applying a time series analysis uses past data to predict future demands.
Because the electric fans manufactured at Riordan are affected by a seasonal demand with production increasing in the summer months, applying a weighted moving average would be the most beneficial forecasting method. For example, Riordan reports that, historically, production for the month of May is best derived from a weighting of two percent of the units produced in January, two percent of the units produced in February, 50% percent of the units produced in March, and 90% of units produced in April. The calculation for the May production forecast is computed as follows and displayed in Table 1. , Riordan May Production Forecast. F May Production = . 02(40) + . 02(40) + . 05 (70) + . 90 (85) = . 8 + . 8 + 35 + 76. 5 = 113. 10 Table 1. 3 Riordan May Production Forecast Month| January| February| March| April| May| Production in thousands of units| 40 | 40| 70| 85| Forecast = 113| Implementation Plan/ Gantt chart Changing processes and procedures can be very crucial to a company’s future and difficult work. The implementation of a project will be successful with the commitment from the top management and a talented project manager (Chase, 2006).
The implementation plan for the Riordan electric fans includes a new process design, restructure of the supply chain management process, and an MRP system. The end goal and desired result is to manufacture and sell basic and custom Riordan fans for a profit at a consumer friendly price. Table 1. 4 Implementation Plan for Riordan Manufacturing Fans Conclusion Suppliers are educated and supported in order to ensure that they will deliver services and products that are dependable and on time.
Procedures, products, and systems are qualified and proven prior to implementation and then continually examined and officially modified when the opportunity for improvement is seen. Training is a routine activity for all tasks and will continue to be integrated into new processes and procedures at Riordan Manufacturing. References Chase, R. (2006). Operations Management for Competitive Advantage (11th ed. ). New York, NY: McGraw Hill. University of Phoenix. (2006). Riordan Manufacturing Intranet. Retrieved from http://www. ecampus. phoenix. edu