Supply Chain Design Paper
Lea Smith, Bruno Ferreyra, Daniel Davis, Barry Scotton
OPS/571
August 18, 2014
Willie Maxwell
Supply Chain Design Paper
Supply chain management is a coordinated effort within a supply chain to improve continually and enhance its performance with the end goal of increasing customer satisfaction (Mellat-Parst, 2013). As an international plastics manufacturing firm that specializes in the production of plastic beverage containers, fan, and other custom parts, Riordan Manufacturing relies heavily on its supply chain (University of Phoenix, 2013). Analysis and discussion of Riordan Manufacturing’s supply chain is the focus of this paper.
Manufacturing Strategy
Riordan Manufacturing uses a level manufacturing strategy for its make-to-stock production process. Through maintaining a constant output and stable workforce, Riordan can absorb surpluses and shortages through maintaining inventory levels (Jacobs & Chase, 2011). Riordan estimates demand by taking the average of the three prior years and projecting into the following year. Quarterly employee turnover data from 2009-2011 indicates a stable workforce with a maximum of 3.4% annual involuntary turnover rate over the period (University of Phoenix, 2013). Benefits of this strategy include stable work hours for employees, increasing retention of tenured and highly skilled employees (Jacobs & Chase, 2011).
Electric Fan Supply Chain
Supply Chain Metrics
Two methods of evaluating Riordan Manufacturing’s supply chain process are inventory turnover and weeks of supply. Inventory turnover is a measure of how many times an organization has sold and replaced its inventory over a year. It is calculated by dividing cost of goods sold by the average aggregate inventory value. Weeks of supply indicate the amount of inventory available to an organization at a given point in time. This metric is calculated by dividing average aggregate inventory value by cost of...