Introduction
Operation activities of a firm are mainly related to proper manufacturing, development, and distribution of a product or service. Operations management deals with all activities within an organization like purchase management, inventory control, and materials management. Riordan is a manufacturing company that mainly uses plastic as one of its important raw materials. The company produces all items of plastic for daily use as well as instruments needed in hospitals and has also expanded its business to electronic items like electric fans.
The MRP for the manufacturing of the Riordan electric fans
Raw materials required for the production of electric fans are motors, transformers, polishers, etc. They are brought together under one roof for the production of the finished unit. The plastic parts of the fans are being produced in Hangzhou, China. The plant in China has the technical know-how to manufacture electric fans. A proper material requirement plan (MRP) followed by the firm helps in timely delivery of fans. Riordan Fans have a huge demand in the market and in order to keep its increased demand, it should be committed to timely delivery of fans to its customers. After the raw materials are brought together under one roof, the components are properly assessed and combined together and then trimming is done to properly fix the components for the end product –fans. During the process, many raw materials get converted into scrap. This scrap becomes a loss for the company; so proper utilization of scrap should be made. The main problem that Riordan faces is that of unorganized orders which the company gets due to which sometimes the finished items remain in stock only and causes wear and tear. The MRP for manufacturing of electric fans is determined by the forecasted demand, supply and also availability of raw materials, tracking of inventory level and getting proper sales orders and also the distribution process through shipping in international markets.
A new process design for the production of the Riordan electric fans
At present, the plant in China projects its own future demand of fans single-handedly; so the plant takes orders from individual customers. It also procures raw materials within the Chinese markets which are at present inadequate for timely delivery of materials; so the firm can look out for other alternative suppliers of raw materials. The firm should also try to reduce the cost of raw materials procured within the country by giving bulk orders. The lead time in the process of production should be reduced to minimize delays in production. The bill of materials and the product specifications should be checked while adopting a new process design. The raw materials can be procured at a single shipping invoice. Some changes in the MRP can help in obtaining orders in a pattern.
A supply chain for the electric fans
Existence of supply chain within the country is an advantage for the production of Riordan Electric Fans. Low labor costs involved in transportation of raw materials are also an added advantage. While preparing the plan of supply materials, procurement contract should be analyzed. “Contracting for services presents challenges that fundamentally differ from the procurement of goods, and these challenges must be effectively addressed in the services contract” (Elemica, et al., 2008, para.12). Procurement of raw materials from outside agents though increases transportation costs; if they ensure quality and timely delivery, then such supply chain can be adopted. Labor hired from the Chinese market itself involves less payment of costs; in turn it reduces production cost.
Production forecast for the Riordan electric fans
Production forecast is mainly based on the theory called moving averages. The moving average otherwise can be called as a rolling average. The main intention of following this theory is to “track the trends of financial assets by smoothing out the day-to-day price fluctuations” (Murphy, 2010, para.2). In other words, these can be used to estimate the direction of up-to-date trends. The method of calculating next year’s production demand is based on last three years’ average sales. It is expected to focus on all sorts of customers in the coming year by producing customized versions of electric fans. This is mainly based on individual customer contracts. Design and development of the product are strictly based on customer contracts. Thus, final price of the product can be finalized only after product is completely manufactured. So, different types of forecast tools such as setting up, scheduling, manufacturing and delivery are analyzed on the basis of yearly necessities rather than calculating early in the year in advance.
Adoption of lean production strategy is one of the best methods. The main aim of following this strategy is to reduce or eliminate waste. Apart from this, this strategy helps simplify the process and also increases the production speed. An implementation plan, including a Gantt chart of the design process, for Riordan electric fans
Gantt chart
The production plan can be done in two phases. First phase is called project A and second phase is called project B. There are four tasks under project A and three tasks under project B. Every task has been scheduled nearly for one month except Task B3 which is execution of total quality management and maintenance which is scheduled for nearly 2 months.
A cover letter detailing how you will coordinate aggregate operations planning and TQM for the Riordan electric fans
Date _______
Address of sender ____________
Address of Recipient _______________
Respected Sir,
I am happy to bring in the proposal for execution of lean production and total quality management for improving the design process of Riordan manufacturing.
There are plenty of options in order to measure the current operational process. The picking of best tools for lean production and quality is necessary while planning for material requirements.
The implementation consists of two phases. Pilot project is the first phase in which all sorts of errors upcoming in the forecast demand process are identified and production plan is the second phase which includes different measures to satisfy the customer demands by measuring the number of fans ordered by different customers.
Concepts of six sigma are used to scrutinize other project parameters such as reduction of cost, defect prevention, issues regarding quality and enriching the production process.
I am looking forward to hearing your valuable feedback on this proposal. Please feel free to contact me either through my email [—–@—-.com] or through phone [—, —, —-]
Yours Sincerely,
Name.
Conclusion
The overall design explained above is very useful in knowing the operations and different steps involved in the manufacturing of fans. This proposal contributes something more for the organization to function in a better way.
Reference
Elemica., & et al. (2008). 2010 indirect spend china submit. China Supply Chain Council. Web.
Murphy, C. (2010). Moving averages: Introduction. Investopedia. Web.