Riordan Manufacturing Team Paper

Topics: Forecasting, Inventory, Customer service Pages: 5 (1372 words) Published: June 29, 2015


Riordan Manufacturing
Tiffany Poppe-Myhre, Tierney Kennedy, Tyeisha Humphrey, Yadira Desvergunat OPS/571
January 31, 2015
Professor Gregory Waters

Riordan Manufacturing

Riordan Manufacturing Strategy
Riordan Manufacturing utilizes the level strategy based on its inventory management. This strategy will ensure consistency in operations, manufacturing and delivery of its products. The plant's business is make-to-stock in which the future demand for fans is forecasted based on taking the average sales for the last three years and estimating the next year. The assumption in using this forecasting method is that history will repeat itself within manageable limits (Riordan Manufacturing, 2013). Riordan has a strategic goal of reaching $50 million revenue mark within two years. They plan on utilizing its staff and front line managers in order to reach this goal. This is where the benefits from the level strategy will be most important. The level strategy maintains a stable workforce, working at a constant output rate. Shortages and surpluses are absorbed by fluctuating inventory levels, order backlogs, and lost sales (Jacobs & Chase, 2011). Employees in a level strategic manufacturing facility benefit from stable work hours at the costs of potentially decreased customer service levels and increased inventory costs. Additional concerns are the possibility that products held in inventory run the risk of becoming obsolete (Jacobs & Chase, 2011). By having inventory on demand and an aggressive sales approach with a full staff, Riordan will be able to meet its customer’s needs, setting them apart from any competition

Process Flow Diagram

Evaluate Performance
Riordan will use customer satisfaction and on-time delivery to measure the performance of the electric fan supply chain. Customer satisfaction is likely to be higher if the company can minimize the defects found in the fans. According to Milliken (2001), “An effective performance measurement process is critical to ensure continuous improvement in supply chain processes.” Supplier Relationship

Riordan Manufacturing has one Research and Development facility. This facility is used to design models of heart valves and other medical devices. Because of the small size of this location it doesn’t require as much raw material as the other. Riordan has three main plants located in:

oAlbany, GA
oPontiac, MI
oHangzhou, China
The plant in Albany, GA is used to produce plastic bottles. The plant in Pontiac, MI handles custom plastic fabrication. And, the Hangzhou, China location produces electric fans. The company had operation earnings as follows:

oOperating earnings: 9 million dollars
oSales earnings: 50 million dollars
oFree Cash Flow: 4.5 million dollars
Riordan uses on-time delivery and the lateness to measure supplier performance. The company explores if they are meeting these measure and others by using a balanced scorecard (BSC). In Riordan’s current year scorecard and cascading alignment one can see the importance of ensuring that products are delivered on time market and that new products are launched and developed. Timeliness through innovation is also important to Riordan. The company has initiatives in place to collaborate with their customers to improve their design capability. Lean Production

Lean Production principles are used to maximize the efficiency of the electric fan production with Riordan Manufacturing. Lean production focuses on customer value by eliminating waste. Riordan will manage lean production through continuous improvement with purpose, process, and people. Riordan Manufacturing has production plants in Georgia, Michigan, and China so processes and the lean culture must be consistent in each plant for operational success. Electric fan parts are produced in Hangzhou, China. Purpose is why the organization exists. Riordan has committed to focus on what the customer desires from the...

References: Chase, Richard. & Jacobs, Robert. F. “Operations and Supply Chain Management/Edition 13”
March 2010. Retrieved from: http://online.vitalsource.com/#/books/9781121899308/pages/77477370
Milliken, A. L. (2001). Key ingredients of successful performance metrics in the supply chain. The Journal of Business Forecasting Methods & Systems, 20(2), 23-28. Retrieved from http://search.proquest.com/docview/226914394?accountid=458
Riordan Manufacturing. (2013). Riordan Manufacturing. Retrieved from http://ecampus.phoenix.edu/secure/aapd/CIST/VOP/Business/Riordan/index.asp
University of Phoenix. (2013). Riordan Manufacturing. Retrieved from University of Phoenix, OPS 571 website.
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