Riordan Week 4 Chain Supply OPS 571

Topics: Supply chain management, Electric motor, Inventory Pages: 10 (1637 words) Published: April 28, 2014

Riordan Manufacturing: Supply Chain Design Paper
Riordan Manufacturing, a leading global manufacturer of plastic containers, parts, and fan parts, is wholly owned by Riordan Industries, Inc. Riordan’s fan manufacturing plant was purchased in 1992 when it was located in Michigan. In 2000, the company moved its fan manufacturing operation to China where it now resides.

Riordan schedules manufacturing of fan parts based on forecasted production needs using an averaged three year sales history. Riordan’s make-to-stock system benefits customers who need products quickly with orders filled from inventory when received. Riordan employs a robust shipping department including a variety of reliable shipping solutions from the plant in China to worldwide customers. Riordan Manufacturing’s electric fan production plant is continually analyzing its strategies. Process flows, performance metrics, supplier relationships and supply chain efficiencies, lean production principles, and sales forecasting are essential to the success of Riordan. The company uses reports and plans for material acquisition, production, and scheduling in its manufacturing facilities. Riordan’s Manufacturing Strategy

Riordan’s manufacturing strategy is a stable workforce for two reasons; first, “it schedules production of fans to meet the forecasted sales” and the forecast is calculated by “taking the average of sales for the last three years and extrapolating it into the next year” (Riordan Mgf. Operations - Supply Chain (Hangzhou, China), 2014). Second, according to the Riordan’s Employee Turnover Report 2009-2012, the actual percentage of involuntary separations has decreased from 3.4% in 2009 to 2.0% in 2012. This marginal decrease in involuntary turnovers indicates Riordan is maintaining a stable workforce. Riordan benefits from this strategy because “this strategy provides workforce continuity and avoids many of the emotional and tangible costs of hiring and firing associated with the chase strategy” (Chase & Jacobs, 2011). Process Flow Diagrams

Diagram 1. Electric Fan Supply Chain Flow

Diagram 2. Process Flow Diagram for the Electric Fan Supply Chain: United States R & D Facility to Chinese Plant

Performance Metrics

Two metrics utilized to evaluate the performance of the supply chain are the cash conversion cycle (CCC) and direct material received on time. The cash conversion cycle attempts to measure the amount of time each net input dollar is tied up in the production and sales process before it is converted to cash through customer sales (Cash Conversion Cycle (CCC) Definition | Investopedia, 2014). The direct materials received on time for the delivery of the plants plastic polymers was selected because of its impact to Riordan’s product delivery to customers. Diagram 1 indicates Riordan’s efficient supply chain operation which identifies logistical steps and potential bottlenecks in the process. Riordan also uses Post Project Review to identify positive and negative trends in their processes. Riordan uses data from manufacturing operations to identify system inefficiencies to implement change and increase effectiveness. Supplier Relationship and the Effects on the Supply Chain

The two major inputs needed to manufacture the Riordan electric fan are electric fan motors and high-density polyethylene plastic pellets (HDPE). The electric motors are completely assembled units purchased by buyers in the China Plant’s purchasing department from a local Chinese company, Yin Motor Company located in Zhejiang, China. The buyers also purchase the Plant’s requirements for plastic polymers locally (Riordan Mgf. Operations - Supply Chain (Hangzhou, China), 2014). No other information regarding the suppliers of the HDPE pellet could be found on the Riordan Manufacturing website. Riordan has identified three potential supplier concerns that could hinder the supply chain. First, a fax sent from Robert Lord to Mark Neitzel...

References: Cash Conversion Cycle (CCC) Definition | Investopedia. (2014, January 9). Retrieved from Investopedia - Educating the world about finance:
Chase, R. B., & Jacobs, F. R. (2011). Operations and Supply Chain Management, 13e. Boston: McGraw-Hill Irwin.
Fax Sent From Robert Lord To Mark Neitzel. (2014, January 10). Retrieved from Riordan Mfg.: Home: (2014, January 9). Retrieved from Riordan Mfg.: Home:
Riordan Mgf. Operations - Supply Chain (Hangzhou, China). (2014, January 9). Retrieved from Riordan Mfg.: Home:
Soares, M & Vieira, G. A new multi-objective optimization method for master production scheduling based on genetic algorithm. (June 2009). International Journal of Advanced Manufacturing Technology, 41(5/6). Retrieved January 4, 2014 from EBSCOhost database.
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