Ops 571 Week 4
Supply Chain Design
Riordan Manufacturing is a global plastics manufacturer and is a subsidiary of Riordan Industries. Riordan Manufacturing has three main production facilities located in Georgia, Michigan and Hangzhou, China. This paper will focus on the manufacturing business and supply chain activities of the electric fan production in Hangzhou China with information on manufacturing strategy, production performance, supplier relationships, forecasting and inventory.
Manufacturing Strategy Riordan Manufacturing China uses a level manufacturing strategy to produce electric fans. The advantages of using a level manufacturing strategy as defined by Jacobs and Chase (2011) are, “Maintain a stable workforce working at a constant output rate. Shortages and surpluses are absorbed by fluctuating inventory levels, order backlogs, and lost sales. Employees benefit from stable work hours”. The choice of level manufacturing is used by Riordan because Riordan produces fans based on an average of three years combined sales forecast. It does keep a small inventory to account for demand fluctuations. A combination approach could be used in the future to reduce labor costs and more efficiently match demand for make to stock and make to order options.
Supply Chain Flow Chart . Metrics and Supplier Relations
Riordan is able to keep the cost of production minimal while preserving the value of the final product by purchasing the electric fan motors from a third party and assembling the rest of the product in house with adequately trained Chinese workers. Placing the manufacturing plant in China rather than the United States is also a good cost effective tool as they are able to produce and assemble the fans quickly and at a low cost with cheaper labor. To maximize their profits Riordan Manufacturing might consider the following in becoming more efficient, the electric motors used in the fans are completely assembled units purchased from a local
Riordan Manufacturing is a global plastics manufacturer and is a subsidiary of Riordan Industries. Riordan Manufacturing has three main production facilities located in Georgia, Michigan and Hangzhou, China. This paper will focus on the manufacturing business and supply chain activities of the electric fan production in Hangzhou China with information on manufacturing strategy, production performance, supplier relationships, forecasting and inventory.
Manufacturing Strategy Riordan Manufacturing China uses a level manufacturing strategy to produce electric fans. The advantages of using a level manufacturing strategy as defined by Jacobs and Chase (2011) are, “Maintain a stable workforce working at a constant output rate. Shortages and surpluses are absorbed by fluctuating inventory levels, order backlogs, and lost sales. Employees benefit from stable work hours”. The choice of level manufacturing is used by Riordan because Riordan produces fans based on an average of three years combined sales forecast. It does keep a small inventory to account for demand fluctuations. A combination approach could be used in the future to reduce labor costs and more efficiently match demand for make to stock and make to order options.
Supply Chain Flow Chart . Metrics and Supplier Relations
Riordan is able to keep the cost of production minimal while preserving the value of the final product by purchasing the electric fan motors from a third party and assembling the rest of the product in house with adequately trained Chinese workers. Placing the manufacturing plant in China rather than the United States is also a good cost effective tool as they are able to produce and assemble the fans quickly and at a low cost with cheaper labor. To maximize their profits Riordan Manufacturing might consider the following in becoming more efficient, the electric motors used in the fans are completely assembled units purchased from a local
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