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Date Created: 11/12/15
Abstract Riordan plant in Hangzhou China operates its manufacturing unit to prepare the electric fan to provide the worldwide supply based on the production forecast sales extrapolated using the theory of moving averages for last three years The present paper discusses the impact of lean production and strategic capacity planning along with supply chain concepts to design the new manufacturing process of Riordan electric fans to meet the objective of maximum profitability for the company Strategic Capacity Planning for Riordan Electric Fans There are three centers of Riordan in Albany Pontiac and Hangzhou which controls the operational activities of manufacturing the fans and order fulfillment of the product to the customer The manufacturing unit located in China and Michigan produces custom parts which is required for different components of different items But consolidation of these two production plant will reduce the expenditure on equipment and manufacturing process can be optimized at one location to meet the demands based on production forecast The combined system will also improve the delivery schedule of order through better coordination between inventory management production shipping and delivery The availability of raw materials is added advantage Strategic capacity planning is essential in optimal usage of resources with minimum wastage of raw materials to achieve the customer demand in timely manner to create the products at lowest cost The current process of Riordan Manufacturing39s China plant operation is based on the quantity of fans to be produced The local company is supposed to provide the required stock of motors based on the production forecast But this method of operation is able to deliver only 93 of the stock on time The company can opt for alternative manufacturers along With existing unit to meet the forecasted production of motors This Will increase the competitiveness among the manufacturing unit and delivery schedule Will not have slippages There are other options of keeping the readymade supplies of motors as inventory unit in Riordan inventory itself But it Will increase the inventory cost Since plastic polymer used in electric fans has plenty of supplies the lower stock of plastic polymer can balance the cost to reduce the financial burden due to extra stock of motors To improve the competitive nature of company in the business of electric fans requires vision of farsighted capacity planning to match the rising number of fans needed in the market The breakeven analysis of financial statement can provide insight into deciding the course of action to modify the existing process Lean production using justintime system can be very effective in operation processes along With better strategic planning for meeting the demand of customer Implications of Lean Production Lean production using the concepts of J ustInTime is right concept to optimize the strategic capacity planning inventory management production and scheduling of the products in the market at right location in right amount at the right time to increase the revenue of the company Shields 1999 This is based on the concepts that produce only When it is needed It is useful in minimizing the production of items that can remain idle in the stock The selection of right tools for Lean Production and quality can provide insight regarding the material requirement planning and strategy to meet the demands of periodic order besides the current forecasting based on yearly demand This also assists in eliminating the generation of waste products as well as reducing the workinprocess time since lean production does not allow the waiting time and gap in production and supply J IT production is supposed to be the best option available for improving the current process as it produces only when there is demand of the item Lean production requires paradigm shift in the current production process by designing new work ow process to streamline all the activities related to production from inception to completion The application of TQM is necessary to measure the efficiency of new process and whether it is costeffective in comparison to previous process with application of six sigma processes Pareto and control chart can provide statistical measure to optimize the process in due course of time Scheduling vendor management inventory planning and regular maintenance is important aspect of keep the operation running without halting the process of production A supply chain for the electric fans The Supply Chain Management process is at the very center of all the core operational processes of a company It plays the role of a central nervous system regulating the product ow by managing the associated information ow that runs through a company It has very strong linkages with major core processes like product development management purchasing management and customer relationship management For instance the linkage between the Riordan Electric fan development management process and the Supply Chain Management process is bidirectional on one side the product development process feeds the Supply Chain Management process with the electric fans introduction plans and engineering change notices on bill of materials and routings while in return the Supply Chain Management process provides the product development process with the supply chain constraints that need to be considered when scheduling the development of fans in order to make sure that these products will hit the market at the right time It will provide the Riordan Manufacturing an edge in the market over other rival companies Chase 2006 Outsourcing is one of the approach to offshoot the responsibility and decision criteria to other companies which can take care of the several components of the supplychain The inventory management process can reduce the cost of operating firm s own distribution center from remote location which is huge relief in handling the logistics Polakoff 2009 Global product sourcing and mass customization is also one of the feasible options which provides the procurement process with the future purchasing requirements that have been derived from the demand and production plans while the procurement process provides in return visibility on supply constraints in other words quotas imposed by suppliers that need to be considered to generate valid supply chain plans It also reduces the cost of procurement which is available at lower price in other countries The supply chain process can concentrate on inventory management process in the system to fulfill the order requested Chase 2006 Riordan focuses on management of inventory from raw material to completion of finished product It is necessary for tracking the quality and need of inventory in timely manner to extract optimum performance from supplychain process The network topology of supplychain should be wellconnected in identifying the adequate supply of materials for production of electric fans as well as forecasting the future production sales Chase 2006 The categorization of product helps in ordering the right amount of parts from the concerned supplier The improvement in measurement process is deciding factor in raising the customer satisfaction index with sufficient cost reduction which is the primary objective of the Riordan business strategy Conclusion The process improvement plan of manufacturing plant in China requires careful attention in MRP Supply chain and production forecast sales to maximize the revenue of operating unit as well as increasing the customer base With installation of Lean production and introduction of total quality management concepts This Wi11be helpful in preparing the counter strategy to meet the random orders in periodic phase Which is currently based on the yearly demand of the electric fans from the customer References Chase Richard B Jacobs F R amp Aquilano Nichlas J 2006 Operations management for competitive advantage 11th ed New York McGrawHill Chauhan S Nagi R amp Proth J 2004 Strategic capacity planning in supply chain design for a new market opportunity International Journal of Production Research 4211 p 2197 2206 Retrieved from EBSCOHost on August 6 2009 Coulter M amp Robbins S 2002 Management managing change and innovation Saddle River NJ Prentice Hall 13 p 344 Krajewski Lee J amp Ritzman Larry P 2005 Operations Management Processes and Value Chains Upper Saddle River New Jersey Prentice Hall Shields T 1999 Tutorials lean production lean manufacturing Defense Acquisition University Retrieved August 28 2009 from httpwwwdaumileducdeptmm dept resourcesnavbarlean01rdgleanasp University of Phoenix 2009 Riordan manufacturing virtual organization Retrieved August 18 2009 from Apollo Group Inc Week Four OPS571 Operations Management
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