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Lean Production Planning

In: Business and Management

Submitted By anitaclass
Words 592
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Lean Production Planning Lean production planning is a concept developed in Japan, which is based on finishing goods when they are needed (Chase, Jacobs, & Aquilano, 2006). For Riordan to implement this type of plan, an entire new strategy will need to be developed for handling inventory. Currently, each Riordan plant handles inventory independently. Now Riordan must centralize inventory and ordering systems. The two systems need to be centralized because lean production is based on the theory that goods are produced when needed, thus eliminating waste (Chase, Jacobs, & Aquiliano, 2006).
Current Situation In China, the suppliers’ on-time delivery rate is only 93%. This is an unacceptable rate in a lean production planning environment. To increase this percentage, the plant will need to have deliveries more frequent so materials are always on hand. This would eliminate a potential bottleneck by having inventory on hand to mitigate a negative effect on production times. Another change to implement is in the receiving of raw materials and the shipping of their finished goods
Process Improvement Part of the just in time theory of lean production is it reaches the customer “in time”. This can be accomplished by proceeding with the Shanghai move. This would reduce the steps needed to distribute products to customers. In addition to a decreased throughput time for finished goods to reach the customer, Riordan could save money, thus eliminating wasteful spending.
Benefits
By centralizing inventory and customer orders, increasing on-time deliveries from suppliers, and eliminating the shipping bottleneck, the Hangzhou plant can minimize the cash outlay by pre-planning production and developing an efficient system that eliminates the most waste possible.
New Supply Chain Process It is extremely important for each…...

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