Supply Chain Design Paper
June 29, 2015
Riordan Manufacturing Strategy
Riordan Manufacturing is a Fortune 1000 company that manufactures plastics worldwide. Founded by chemist Dr. Riordan in 1991, their factories produce plastic beverage containers, plastic parts, and plastic fans. The company also has a research and development facility located at the corporate headquarters in San Jose, California. Initially, the company's emphasis was on research and development and growing and developing existing patents. However, in 1992 Dr. Riordan obtained venture capital and leveraged a fan manufacturing facility in Pontiac, Michigan. A year later he purchased the plant in Albany, Georgia, and in 2000 expanded to China and moved all existing fan manufacturing to Hangzhou. This paper will focus on the supply chain and electric fan production in China.
Riordan’s plant in Hangzhou, China uses the level manufacturing strategy. They produce a make-to-stock supply by forecasting future demand based on the last three years of sales. The company calculates the following year predicted sales based on this number. With this strategy, they can keep a small amount of stock on hand for fluctuations in demand. Jacobs and Chase (2011) describe the advantages to the level strategy as the ability to “Maintain a stable workforce is 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". Throughout the year, sporadic orders for fans come in randomly that make it difficult for Riordan to estimate material requirements. In the future, it may be in their interest to look at a combination approach to reducing labor and meet market demand.
Supply Chain Flow Chart
Supply Chain Performance evaluation...