Production Plan for Riordan Manufacturing
Production planning includes strategic capacity planning and lean production to provide the most efficient and cost effect process design and supply chain. Riordan Manufacturing has a capacity plan in place that supports both the design capacity and the output plans for the organization however remaining competitive in a rapidly changing business requires constant process evaluation. Strategic capacity planning and lean production may aid Riordan in reaching the best operating level. The purpose of this paper is to address the potential process improvements concerning strategic capacity planning and lean production for the Riordan Manufacturing ...view middle of the document...
This particular plan would not be effective if there was a lack of space, or production is done far in advance. Strategic capacity planning in the supply chain manages the demand of new opportunities at a minimal cost (Chase, Jacobs & Aquilano, 2006).
Strategic capacity planning is critical to implement the long term capacity needs to ensure that the company remains competitive within the industry. Poorly planned capacity needs can help the competition costing the business customers (Chase, Jacobs & Aquilano, 2006). A breakeven analysis can help Riordan Manufacturing determine the appropriate size of their business that influence the change of their product prices or services.
Riordan Manufacturing designs and builds electric fans in Hangzhou, China to sell throughout the world. The facility operates as a decentralized unit of Riordan Manufacturing. The company builds the plastic parts required for the fans, purchases the electric motors for the fans from a supplier, and assembles the fans using the manufactured plastic parts and the fans. The company currently purchases fans and raw material for the manufacture of the plastic parts as they require them. The process for the design and manufacture of electric fans at Riordan will improve by implementing lean production concepts.
Lean production uses design activity to achieve the required production using minimal raw materials, work-in-process, and finished goods resulting in minimal waste in the production process (Chase, Jacobs, & Aquilano, 2006). The first step to achieve lean production would be to develop a strong relationship with the supplier of the electric motors and the plastic polymers. The electric motors come from a local Chinese company. The company has an on-time delivery average of only 93%. The plastic polymers are also purchased from a Chinese company. Forging a strong relationship between the various entities will enable the companies to create a supply chain system that will facilitate just-in-time production. Just-in-time production will reduce production inventory to the minimal amount of raw material to meet production demands. New orders would be simultaneously received by Riordan with the electrical motor company delivering motors and the plastic polymers...