Lean Production Planning Essay

584 Words Jul 28th, 2010 3 Pages
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
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Currently, various bottlenecks exist within their suppliers, distributors, inventory, and information management.
Ideas for Improvement They should improve the processes by consolidating all of the company’s departments and functions by using Enterprise Resource Planning (ERP) and vendor management inventory system. A ERP system would allow their China location to integrate all departments, such as sales, inventory, manufacturing, and billing. The use of this system would serve many purposes: improvement of communication between departments, loss of minimal information and allow departments to retrieve information easily and efficiently (Topbits, 2010). This type of system would strengthen the relationship between each department by integrating the supply chain business processes and promoting shared information. An ERP is also a system, which allows improved communication between the companies and the buyers. Experience has shown a collaborative inventory management system will demonstrate improvements in these areas that can result in the elimination of 20%-30% of the previously required supply chain inventory (The Supply Chain Company, 2010). This type of inventory system would allow Riordan to work with the buying companies by sharing information and inventory. Riordan would then have to maintain a decreased amount of safety stock throughout the year.

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