Riordan Supply Chain Design Essay

1366 words - 6 pages

Review the Riordan Manufacturing Virtual Organization.

Write a paper of no more than 1,400-words that includes the following:

•Determine Riordan's manufacturing strategy (chase, level, or combination) and explain its benefits
•Create a process flow diagram for the electric fan supply chain
•Select two metrics to evaluate performance of the electric fan supply chain
•Describe the supplier relationship and the effects on the supply chain. As part of this consider the following:
â—¦Type of relationship
â—¦Supplier location, size of company, and financial stability
â—¦Metrics used to measure supplier performance (on-time delivery, defects, etc)
â—¦Supplier ...view middle of the document...

Riordan Manufacturing’s electric fan production plant is continually analyzing its strategies. Process flows, performance metrics, supplier relationships and supply chain efficiencies, lean production principles, and sales forecasting are essential to the success of Riordan.
Riordan Manufacturing Strategy
The three types of manufacturing strategies are chase, level, and combination. Riordan, with regards to their production of electric fan manufacturing, falls under the category of level manufacturing because they “set production at a fixed rate (usually to meet average demand) and use inventory to absorb variations in demand. During periods of low demand, overproduction is stored as inventory, to be depleted in periods of high demand,” (Prenhall, n.d.). A benefit from this type of strategy is that there should always be enough material in stock to continue production in higher tempos. Another benefit companies may experience from this strategy is that stockpiling may allow for employers to keep employees on staff instead of laying them off because they continue production regardless of the amount of goods they sell to consumers, and over time, everything usually levels off. The downfall of this method is that there is a cost to the company associated with stock sitting on the shelves during the lower tempo sells periods.
Riordan Manufacturing Fan Supply Chain Process Flow Diagram

Performance Evaluation Metrics
Two metrics that may be used to evaluate the performance of the electric fan supply chain are their on-time deliveries rate and the price of their fans that results from their supply and distribution methods. Their primary operation is based on the make-to-stock method where a predetermined quantity of fans is manufactured annually based on the average number of orders from the previous three years.
Due to their reliance on outside companies to produce fan parts, and the execution of production through the make-to-stock method, Riordan has face some problems with on-time deliveries because they either do not produce enough fans based on forecasting or they face an issue with the supply of the prebuilt motors that are manufactured locally. Riordan has tried to maintain a fair amount of excess stock in an attempt to combat the periodic individual orders, but they are not always successful. The company has a 93% on-time delivery rate for the past year. Although this rate is not relatively horrible, it is certainly not stellar.
Another complication is that most of their international business stems from custom orders that take longer to manufacture and distribute. Additionally, some of the custom orders that are shipped internationally require special licensing or are contractually obligated to be shipped a certain way. As with anything...

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