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Process design for Riordan Manufacturing - Essay Example

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A new process design for the production of Riordan electric fans will need designs associated with material requirements planning (MRP), supply chain processes, production forecasts, and implementation plans…
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Process design for Riordan Manufacturing
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Download file to see previous pages A new process design for the production of Riordan electric fans will need designs associated with material requirements planning (MRP), supply chain processes, production forecasts, and implementation plans.The MRP helps in specifying when production and purchase orders must be placed for each part and subassembly to complete the product on schedule Effective planning and controls associated with the supply chain process and demand can help in inventory management. Demand variations are the norm in the business environment; therefore, supply chain processes, forecasts, and implementation plans have to include the flexibility necessary to cope with demand variations. Material Requirements Planning The reason companies use an MRP system is to “approach problems, determine the number of parts, components, and materials needed to produce each end item. MRP also provides the schedule specifying when each of these materials, parts, and components should be ordered or produced” (Chase, Jacobs, & Aquilano, 2006, p. 630). Riordan’s facilities for parts and facilities for production are in different locations. In order to keep up with everything that Riordan is doing and desires to do they must implement an MRP system that will allow them to manage inventory and production schedules. It will also allow them to keep up with production output and will make sure they are utilizing and operating at maximum capacity without overloading the production process by monitoring all aspects and all locations involved in production. An MRP system will further improve Riordan’s level of customer service and track billing, inventory and all other areas of production and delivery in one system in which all locations are on the same page. The system will allow triggers for ordering, slowing and speeding up production, parts, etc maintaining a consistent level of operation and low inventory based on need. New Process Design Changes in three areas of process design can have a tremendous impact on Riordan’s China plants efficiency and in turn allow Riordan to achieve higher profits through higher on-time delivery of their products. Electric Motor delivery issues In the current process Riordan has outsourced its electric motors for their fans. The company they use is a local Chinese company that only has a 93% on-time delivery average. Riordan may realize greater on-time delivery if this process was not outsourced but moved in-house. This would ensure a higher on-time delivery of a much needed part for the fans they produce. Orders and shipping/delivery The current forecasting method for fan production is based on the last three year sales average sales. The shipping method for local orders is that they can be picked up at the plant, which is good because there is no show room or warehouse cost associated with storing the unsold fans. Fans to be delivered within China, Riordan use a local company, much like UPS or FedEx. For international deliveries Riordan uses FedEx. 31.6% of the population in China has Internet access (Internet World Stats, 2010). The use of the Internet as an ordering tool to allow potential customers, both individuals and businesses, to place orders would both stream line the ordering process as well as allow Riordan to forecast better the number of fans to produce. Special Order Fans Riordan also produces a certain number of fans for special orders that would be produced with special specifications. Riordan designs the new fan according to customer’s specification. Once the fan is approved, a small number of the fans are created under a separate contract. There are no forecast numbers for special orders. Riordan would benefit here from a website aimed at past business customers to allow them order or reorder past products. Supply Chain Process Strategic ...Download file to see next pagesRead More
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