Riordan Manufacturing is a plastics manufacturer that has products across multiple areas, including plastic beverage containers and electric fan parts. They have manufacturing facilities in Michigan, Georgia, and China. This particular paper will focus on the manufacturing of the electric fans, which takes place in their China facility. Dissecting their overall production from manufacturing the pieces to their inventory management will be a main focus of the analysis.
In order to product the electric fans, Riordan uses a level manufacturing strategy. There are many advantages when it comes to a level strategy. The first is that it brings a consistent performance from an output perspective. Having a sustainable and stable workforce means that surpluses and shortages are not as evident with employees working consistent hours. As far as the calculations of potential forecast are concerned, Riordan makes their decisions based upon an average of three years of revenue. Now, if the demand increases drastically then there is not a great deal of inventory on hand to account for the change in trend, but the production can be modified by increasing workforce or man hours for the additional revenue potential. A combination approach is one that seems like it would be of use to Riordan, on the cost effectiveness alone. It could help to reduce labor and match the demand much closer as far as inventory on hand, but in this stage it is difficult for Riordan to decrease their buffer any more than the current forecasting methods. The China operation has only been around since 2000, so there is not enough data to show hard trends when the market share
Aggregate Production Plan
Riordan has the goals to reduce their costs by 10% and cycle time by 15% over the next year. Having the different products with difficult areas of prediction makes it crucial for Riordan to accurately produce the products based upon initial forecast with minimal waste....