Ops 571 - Supply Chain Design - Riordan Manufacturing

Supply Chain Design Team C

OPS/571

November 30, 2015

                Introduction

        This week Team C will outline and discuss the supply chain design for the virtual company of Riordan Manufacturing. We will identify the company’s manufacturing strategy, produce a flow diagram for the electric fan supply chain and identify two metrics used to evaluate the performance. Additionally, we will discuss the supplier’s relationship and effects on the supply chain and how lean production principles are used to maximize effectiveness and efficiency. Further more we will identify the businesses forecasting methods and create a sales forecast. Last but not least we will develop an aggregated production plan, master schedule and materials required for manufacturing electric fans based off the sales forecast.

Manufacturing Strategy

        Riordan Manufacturing produces their electric fans on a make-to-stock basis. This method allows Riordan to manufacture goods in a long running fashion which increases efficiencies.  Production units are calculated by using the data from amounts sold over the past 3 years to make their forecasted prediction. This method allows Riordan to manufacture their product using a level production strategy. By forecasting the amount of units needed over the next year, Riordan can schedule the amount of workforce needed to accomplish these demands. This allows for an effective and efficient unchanging workforce and the ability to maintain a steady yield.

Process Flow Diagram

Performance Metrics

Supplier Relationship and Effects

        The relationship structure that Riordan has with its suppliers is very dependent.  As such, the impact of these relationships on the supply chain is direct.  Bottle products, plastic polymers and electric motors used in the creation of the fans are some of the parts that the supplier provides Riordan.  Riordan must keep an open line of communication with its suppliers to ensure that the appropriate level of parts is being sent to Riordan on a continual basis.  Since there are domestic and foreign suppliers, in China, that Riordan uses it is crucial for Riordan to keep their suppliers up to speed on what is happening within the business.  Following this communication outline with the suppliers, Riordan can fulfill orders that were forecasted and unexpected.  Although Riordan likes to use its foreign trade channels because they receive their parts for a fraction of what they cost in the United States, China also poses a challenge when it comes to importing goods into the U.S.

 Since Riordan has had many repeat customers they have been able to have great financial stability over the years.  Furthermore, Riordan’s versatility in making not only mass produced electric fans, but also custom fans has given them an edge in the market to pick up new customers. A downfall that Riordan sometimes faces is there on time delivery speed that is attributed to the transportation and design of the products worldwide.  In the pursuit of improvement, Riordan must utilize there large warehouses to stockpile commonly used parts so they can avoid having to purchase foreign parts more frequently.  Stockpiling the parts might pose a greater financial risk for the company, but it can also pose a great reward in terms of time saved on receiving the parts and shipping the product to the customer.  In addition to implementing a stockpile, it would also be a good idea to move the shipping operation in house to further increase the efficiency of the delivery process and to hit internal objectives.