Riordan Manufacturing is a global plastics manufacturer and industry leader in the field of plastic injection molding with locations in Georgia, Michigan, California, and their most current expansion in 2000 to Hangzhou, China. The plant located in China manufactures fans using a make-to-stock operation that uses a forecasting method to determine future demand. A review of their strategic capacity planning and lean production for their new process design and supply chain process for the electric fans will address bottleneck and supply chain issues.

Also outlined are the details of new processes and how the benefit the company. Forecasting The demand for fans is forecasted based on taking the average of sales for the last three years and extrapolating it into the following year. This forecasting method assumes history will repeat itself within manageable limits. “The objective of strategic capacity planning is to provide an approach for determining the overall capacity level of capital intensive resources-facilities, equipment, and overall labor force size- that best supports the company’s long range competitive strategy. (Chase, Jacobs, & Aquilano, 2005 p. 430)There are several ways to improve this current method of operation.

First, the forecasting should include customer demand in order to minimize waste. One of the requirements for determining capacity is to use forecasting techniques to predict sales for individual products. “Time Series analysis is based on the idea that data relating to past demand can be used to predict future. Past data may include several components, such as trend, seasonal, or cyclical influences.

” (Chase, Jacobs, & Aquilano, 2005 p. 18)The future demand for fans should be based on time series analysis using monthly sales trends. Ordering System The China plant manufactures both basic electric fans and custom order electric fan for customers worldwide. Forecast for the basic fans are based on the average sales from the past three years, while estimates for custom order fans are not forecasted but are based on the customer’s estimated yearly requirements. An issue arises when periodic an order for fans against the contracted yearly total is received randomly and at varying quantities throughout the year.

This makes it difficult for the plant to stock materials required in the short term. Another problem is the company supplying the motors for the fans. Their on time delivery rate is only 93%. This leads to a bottleneck in manufacturing.

A solution for these problems is to implement an effective ordering system or process. In order to improve the 7% lag time a second motor supplier could be used to fill the gap. There should be a maximum amount of units per month, and a specified date the units are needed. For custom orders, a specific date or deadline should be a requirement and included in the contract.

Setting these specific guidelines in the plants’ ordering system will improve the 7% lag time in deliveries. Lean Production When the bottlenecks in a process are exposed there is a strong correlation between a strategic capacity plan and lean production. When Riordan implements a new process, lean production can be achieved. More can be accomplished efficiently in less time due to a continuous production flow (Kotelnikov, V. , n.

d. ). The new ordering system will allow for all products needed to be available just-in-time to begin production.Eventually, as a more specialized cross-functional team is developed, the integration of the value chain is able to offer quality work to produce electric fans and distribute to their buyers worldwide. As the cross-functional team operates effectively group technology becomes the leading force to eliminate waste because more precise measures are being performed (Chase, Jacobs, & Aquilano, 2010, p.

473). Cross-Functional Team A cross-functional team is employees from different functional areas aligning their skills toward a goal.Currently, Riordan’s functional areas operate individually, sometimes performing roles from other areas. In order to improve their production flow, a cross-functional team approach would clearly define each functional area responsibilities and identify areas where bottlenecks occur. Area one is the Order Receiving department. This team is responsible for processing all orders received from customers.

Once the orders are received and processed, the customer will get a confirmation notice with the expected shipping date.The shipping date will be determined by the number of orders in the queue for the base fan and custom order fans after all orders have been processed through the cross-functional system. The Orders Receiving department will inform the Purchasing Department how many orders are in the queue. Purchasing is responsible for making sure Riordan has the parts available for manufacturing. They will maintain a working stock par level. Having only what is needed on hand reduces storage cost and eliminates stored parts becoming obsolete before reaching the manufacturing line.

Purchasing is also responsible for making sure the packing department, shipping department, and research and development maintain a working stock par level. The number of order are then sent to the production manager. The production manager is responsible manufacturing workflow. The PM will determine how many employees are needed, ensuring they are multi-skilled and implementing a process to switch production from the base fan to the custom order fan with minimal downtime. Multi-skilled employees reduce downtime from a production switch or if an employee is out sick, any employee can fill in.

Once the fans are assembled, they move to the packing department. The packing department is responsible for packaging the fans for shipping or customer pick up. Lighter, less expensive packaging can be used for orders being picked up and heavier packaging can be used for local and international shipping. Currently, research and development is shipping fans. This is a problem because their expertise is not in shipping.

This could also result in a bottleneck. Having dedication employees trained in shipping can reduce shipping errors.They will the experts in shipping regulations both locally and internationally. They will also address customer inquiries on shipping. Finally, research and development will focus on developing new technologies and addressing special order needs.

Riordan is currently a leader in the fan market but without new technology, competitors will surpass them. Their focus should be on developing innovative technology for fans that are energy efficient and will encourage customers to upgrade existed fans.Conclusion According to Goldratt’s Theory of Constraints, it is apparent that as the inadequacies in the process are identified and alternatives are put into practice that a more lean production is developed (Chase, Jacobs, & Aquilano, 2010, p. 721). In addition, Riordan Manufacturing Plant can continue to standby their mission of being six sigma driven as well as, becoming a leading company to benchmark due to the philosophy that raw materials needed will be based on the demand of its customers (Chase, Jacobs, & Aquilano, 2010, p.

471). As an end result total quality control is accomplished, as well as, a profitable return on investment.