Riordan_Process_Design

Running head: PROCESS DESIGN FOR RIORDAN MANUFACTURING Process Design for Riordan Manufacturing Nilesh Shah University of Phoenix, Operations Management Professor Gabriel Pulido-Cejudo March 29, 2010 Abstract Riordan Manufacturing Inc. is quality manufacturer of various plastic products, predesigned and custom made electric fans with state-of-the art designing and manufacturing capabilities in U.S.A. and China. Riordan Manufacturing Inc. is a fortune 1000 company with revenue in excess of one billion. Main goal of Riordan is to achieve Six Sigma or total quality management, new proposed package of process design will help Riordan to achieve its goal. Paper starts with material requirement plan (MRP) for the manufacturing of the Riordan electric fans, a new process design for the production with a new supply chain and any global opportunities available for lowering labor costs. From week three onwards team C was brainstorming and yielded the following process for improvements for fan manufacturing. Material Requirement Plan China plant is using electric motor, fan blades, fan houses and other miscellaneous parts to manufacture standard as well as customize electric fans. Manufacturing fans is make-to-stock operation that blocking company’s financial resources by way of inventories because it is not sold immediately. Riordan with the help of bill of materials, inventory records and database records a computer application can be develop that will give the number of components required to manufacture the particular quantity of fans. Currently inventory reporting is done after the material is taken out to manufacture that makes system slow with possible errors. Another issue with the current system is it create backlog to update the inventory system and which may result in out of stock situation. With new MRP inventory operations inventory transactions such as work order material issues, work order material receipts, work order returns, work order in stock, etc. can be viewed simultaneously. Any material transfer from one unit to another unit will also be scanned before transfer this ensures more accuracy in inventory control. Basic principle of new inventory process is all transactions are records into inventory system before starting manufacturing. Physical inventory audits will maintain system integrity of the existing MRP system. Forecasting, New process design and Supply chain process China plant manufacture the fans based on the forecast of past three year’s average order. Forecasting for new product and fans is never an easy job. To meet the forecasted demand Riordan requires good supply chain that can provide material on time and can deliver the product on time. The supply chain software will help the plant to maintain and forecast demand and supply more accurately for customers ordering customize electric fans to plan business around customer demands, rather than around production capabilities to cut waste of production (Businesslink, 2007). Riordan maintains good relationship with local vendors and has a strong supply chain that can accommodate wide arrangement of quantities. As a part of the improved process Riordan should keep the safety stock of electric motors that will satisfy the peak demand constraint and fulfill the requirement of sudden demand. Riordan had taken right step by transferring fan manufacturing division to China and has clear benefits of opening facility at China. Riordan can avail the benefit of low labor cost and another is if fan business is not doing so strong, Riordan can outsource its Michigan or Georgia plant’s some activities so that they can concentrate on their core business. Seasonal factor is affecting demand, fan is being a seasonal product its demand during summer period is very strong and during winter period is slacked. For forecasting the demand of fans Riordan needs to consider this seasonal factor and plan its production process accordingly. During the summer season of February through May majority of the product will be sold. Therefore, the busiest months for the China facility will be February through May. Riordan can create better forecast by using weighted moving average instead of just last three year forecast. China plant’s supply chain starts local vendors that supply electric motors, polymers miscellaneous parts, and involved in other elements of production process adding the vendors that are engaged in storage activity and ends with its logistics and distribution system of supplying its finished products to the ultimate consumers. There are two systems of distribution for the product wholesale and retail system. Riordan can sell its products to wholesalers who will sale these to retailers and retailers will finally sales the fan to ultimate consumer. Ultimate goal of the company is to receive uninterrupted supply of the raw material, and providing uninterrupted supply of its quality products to ultimate consumer. Riordan’s China plant is currently using an assembly line manufacturing process that assembles standard and customize electric fans. The make to stock process is blocking the company’s financial resources into inventories even if it is not saleable immediately. The company should change its operations from Make to Stock to lean production method, the Just-In-Time production method. According to Chase, Jacobs, and Aquilano (2006), Just-In-Time means producing what is need when needed and no more. Anything over minimum amount of needed supplies is considered waste. If Riordan fan manufacturing meets lean production elements, it will reduce its inventory and eliminate the waste of excess production of the unique fans and improves the production process. An Implementation Plan Success of any project depends on successful implementation. Plan will remain plan on paper unless and until it is executed in proper manner. It can be challenging in the cases were planning and implementation site is different. China’s manufacturing plant is enjoying advantage of low labor cost and strong supply chain management for manufacturing fans and implementing new fan begins with detailed designed plan. The designer will start process of designing new fan with the drawing software CAD (computer aided design). Once the drawing is ready, master blue print will be made and given to tool designer, who will make proto type models of fans using aluminum molds. This step allows manufacturing process to make any changes in aluminum molds before making costly die. With the aluminum molds prototype fans is made. Once it is approved with all specifications and testing dies can be prepared to carry on full production. | | | | | | | | | | | | | | | | | | | | | | | | Production | | | | | | | | | | | | | | | | | | | | |Prototype fan | | | | | | | | | | | | | | | | | | | | |Blue Print | | | | | | | | | | | | | | | | | | | | |Bill of Material | | | | | | | | | | | | | | | | | | | | |Material specification | | | | | | | | | | | | | | | | | | | | |Detailed Design | | | | | | | | | | | | | | | | | | | | | |Start up | | | | | | | | | | | | |  |  |  |  |  |  |  | | | |2 |4 |6 |8 |10 |12 |14 |16 | | | | |Weeks after start of project | | | | | | | | | | | | | | | | | Operation planning and total quality management Chase, Jacobs & Aquilano (2006) defined that “Total quality management is managing the entire organization so that it exceeds on all dimensions of products and services that are important to the customers (p.320). China is standalone facility that manufactures the electric fans and to achieve TQM Riordan has to carefully design its fans and top management needs to make sure that the Riordan’s China facility is consistently produce that quality and design of the fans. Riordan’s goal is to achieve Six Sigma and to achieve that extensive training need to be given to the work force by selecting the staff that has competitive ability of becoming black belt owner, green belt owner or champions. Conclusion In conclusion, the paper described the MRP for the manufacturing of electric fans, new improved processed design for production, a supply chain system and different forecast system for demand of new electric fans. An implementation plan including a Gantt chart for the design process was developed. Lastly, this paper used a total quality management approach for producing the electric fans. This new plan will help Riordan to achieve its goal of Six Sigma. References: Business Link (2007). Practical Advice for Business Retrieve March 29, 2010 from https://www.businesslink.gov.uk Chase, R.B., Jacobs, F.R. & Aquilano N.J. (2006), Operations management for competitive advantage, (11th ed), New York : McGraw- Hill/Irwin, Retrieved March 29, 2010.