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Heiting, McCarthy, Pustina, and Richter
Week 6 Team B
February 5, 2013
Process Design Proposal
Riordan Electric Fan Manufacturing Lack of coordination between:
Forecasting and production.
Facilities. Identified Areas Needing Improvement Inventory logistics management:
Non-value added steps.
Starving of stages.
Lack of quality program. Improvement Needs (continued) Total systems approach: implement a fully integrated, interactive, real-time system capable of multi-site global applications to include:
MRP II to plan and monitor resources of the entire system including manufacturing, engineering, order management, forecasting, marketing, finance, and so on through a closed-loop system.
MRP to control inventory, assign operating priorities, and plan capacity to load the production system
“get the right materials to the right place at the right time”.
Achieve competitive advantage by operating Riordan as a synchronized system with all parts working in concert.
Maximize operating efficiency to improve customer service and profitability. Material Requirements Planning (MRP) and Manufacturing Resource Planning (MRP II) New Process Design Electric motor, wiring harnesses, and switches:
Globally outsource to take advantage of what others do best.
Increase number of suppliers to buffer against regional issues.
Improve strategic partnerships with suppliers to include quality, JIT delivery when appropriate, and Riordan inventory reduction.
Strategic partnerships to include JIT delivery when appropriate.
Maintain more appropriate levels of inventory buffer with an integrated inventory management system. Supply Chain
Strong relationship between supply chain operations and financial performance Qualitative: Grass Roots, Market Research, and Panel consensus (incl. Delphi method).
Individuals and teams working directly with Riordan (sales, production, R&D, suppliers, and retailers) have been surveyed, interviewed, and provided with questionnaires to assist gathering accurate and timely data.
Data gathering and analysis evolves continuously to ensure key stakeholders have quality information for decision making.
Market research, including the use of outside companies, is a priority focus to find new product ideas, satisfaction with existing products, and geographic market variations.
Time Series Analysis (TSA)
Use of regression analysis enables management to link past data with future demand. Exponential smoothing and seasonal variance techniques are utilized in TSA analysis. Riordan Forecasting Techniques
Riordan utilizes several forecasting techniques to assist in essential planning and controlling activities.
Riordan’s primary strategy is to take an active role to influence demand, not just passively respond to it. Causal
The marketing team provides input into the forecast process based on a unique marketing campaign that informs customers how Riordan utilizes new technology to ensure Riordan electric fans far exceed competitor products.
Causal factors are strongly analyzed, particularly seasonal and alternative products such as air conditioning and other HVAC systems.
Riordan uses computer based models to assist in the planning and controlling of business decisions. The use of internal variables and the external environment are essential in this process.
Focus forecasting (e.g., comparing what was sold during a three-month period in prior years) is applied.
Projecting sales based on pricing variations. Riordan Forecasting Techniques (continued) Web-based collaborative planning, forecasting, and replenishment (CPFR) between manufacturers, distributors, and retailers.
It is long-range, but Riordan is working to implement the following:
Creation of front-end partnership agreements.
Joint business planning.
Demand development forecasts.
Inventory replenishment. Riordan Forecasting Techniques (continued) Short-range:
Combine molding and trimming.
Combine packing and shipping.
Better manage HDPE stock.
Improve buffer management of electric components.
Implement total quality control.
Implement Kanban (signs) squares. Implementation Plan Intermediate-range plan:
Implement inventory management and tracking system
Improve existing plant layout and flow
Implement strategic global inventory centers
Improve sales forecasting. Implementation Plan (continued) Long-range:
Define core competencies.
Improve R&D and centralize to Pontiac MI plant.
Develop Lean culture.
Build a new modern highly automated plant in Pontiac MI for customized product to open in two years with ability to expand the plant to consolidate China “made to stock” production within five years. Implementation Plan (continued) Our goal is to achieve competitive advantage by operating Riordan as a synchronized system with all parts working in concert to improve customer service and profitability.
Work flow = cash flow. Organizational Goal Main focus areas include:
Defining and developing core competencies.
Material and Manufacturing Resource Planning (MRP).
New process design.
Supply chain efficiency, including improving strategic partnerships.
Facility planning and enhancement. Conclusion Success is monitored two ways:
Return on investment.
Throughput: the rate $ are generated thru sales.
Inventory: Money invested in what we sell.
Operating Expenses: $ spent to turn inventory into throughput. Conclusion (continued) We are excited about these plans, our progress to date and how these plans will position Riordan for success.
We are especially excited about the new modern plant in Pontiac MI, the consolidation of R&D there, and what that does, not only for Riordan, but the local and national economy. Conclusion (continued) Domestic Portable Fan Market 17 to 20 million portable electric fans sold in the US annually.
75% are imported from China.
Over 86 million households have at least one portable fan.
Approximately 2,500 annual residential structure fires caused by portable electric fans.
There are also numerous reports of portable
electric fans causing electrocution or electric shock.
United States Consumer Product Safety Commission Current Process
Work flow = cash flow
scheduling lies at the heart of the process. Proposed Process Route to Loading Dock Apply Bar Code Packaging & Shipping References Chase, R. B., Jacobs, F. R., & Aquilano, N. J. (2006). Operations management for competitive advantage (11th ed.). New York, NY: McGraw Hill/Irwin. United States, Consumer Product Safety Commission. Washington, DC (2003)