“Riordan Manufacturing is a global plastics manufacturer employing 550 people with projected annual earnings of $46 million. The company is wholly owned by Riordan Industries, a Fortune 1000 enterprise with revenues in excess of $1 billion”. (University of Phoenix, pg. 1, 2013) Riordan corporate headquarters is in San Jose, California. The company’s research and development is conducted here. A chemistry professor Dr. Riordan founded the company in 1991.
Since then it has grown to an international company “with plastic beverage containers produced at its plant in Albany, Georgia, custom plastic parts produced at its plant in Pontiac, Michigan, and plastic fan parts produced at its facilities in Hangzhou, China”. (University of Phoenix, pg. 1, 2013) In 1992 Dr. Riordan obtained venture capital and purchased a fan manufacturing plant in Pontiac, Michigan, the company received its name of Riordan Manufacturing during this. In 2000 the company expanded and moved its entire fan manufacturing operations from Michigan to China.
Mission Statement Riordan Manufacturing mission is to be a world leader in polymer materials. They provide these solutions to customer that are facing challenges and also helps identifying different trends. Riordan customer relationship goal is to facilitate long-term relationships from maintaining innovative designs, responsive customer service, quality control checks, and affordable price. The company commitment to its employees is “to maintain an innovative and team orientated work environment by assuring that our employees are well informed and properly supported, we will provide a climate focused on the long term viability of our company”.
University of Phoenix, pg. 1, 2013) Process Riordan Manufacturing produces their electric fans in China at their Hangzhou plant. The plant focuses on quantity versus quality concerning the production of the fans. Riordan needs to re-evaluate their operations and create a strategic capacity plan to increase the capacity, regulate the capacity, create a strategic plan to improve the supply chain procedure, and determine a more lean production environment.
The creation of a plan guides the company in a way to achieve higher performance metrics with lowering the cost. Riordan can achieve this goal by reviewing the up-to-date production levels and forecast new production levels and techniques. In order for Riordan to accomplish this they will evaluate and look into the areas of strategic planning, capacity, and lean production environments to increase their position to a stronger level of producing these custom electric fans.
This will increase the profit and lower the loss margin. Strategic Capacity Planning Strategic capacity planning “is a process that seeks to balance the use of available resources so that they are used to best effect while resulting in the optimum level of output”. (Wise Geek, pg. 1, 2013) Riordan will need to give a large amount of attention to the production process to ensure extra parts are not wasted/order and make sure that little waste was created throughout this process.
Through the strategic capacity planning process Riordan will be able to identify what costs are with the production of a specific number of finished fans and can do a comparison on that number to the price per unit versus the current market. Riordan’s strategic capacity planning will start with the selection of raw materials; start to finish production process, support expenses involved with the production, and the costs of shipping the sold fans to purchasers. This helps to keep inventory levels lower although still hold a certain level of inventory to meet the customer’s demand effectively.
Because plastic polymer is available worldwide, it can be purchased locally at the place of customer to reduce the margin of increment in cost of inventory. Lean Production Lean production is basically about getting more from less. Riordan’s goal is to decrease the quantity of resources required in the creation of custom fans while making the manufacturing more efficient. For lean production to occur Riordan needs to eliminate waste, use less labor, use less materials, and decrease the amount of space needed to reduce costs.
One method that may be beneficial to save the company money is to outsource. Outsourcing will help Riordan focus on additional business activities and will be able to distribute work globally by taking advantage of regional markets that outsourcing experts could provide. This will reduce operational costs. Project planning and preparation is the beginning step for starting the basic outline of implementation of the lean production in the China Plant.
Following steps are the requirement of gathering and analysis that will define the needs and improvement of existing fan process to create the design for implementation of the project. Supply Chain The Riordan plant in Hangzhou, China is experiencing insufficient order quantities of their customized electric fans. The estimates made on follow-on orders for these custom fans unfortunately are not forecasted. They are simply based on the customers indicating what there estimated requirements for the year will be.
The plant has difficulties estimating the exact amount of materials needed as occasional orders are received throughout the year against their customer contract’s yearly total. These occasional orders make the materials needed increase and are for varying quantities that require a review of Riordan capacity planning. To increase the supply chain process Riordan must review the capacity planning, forecasting processes, and supply chain management to determine the best process of change to enhance the operations, increase profits, and decreased wasted materials. Conclusion
Adequate planning and identification of bottel necks and the proposed solution for optimizing the operations of Riordan Manufacturing Chinese plant will assist with the process of receiving raw materials, handling customized purchases by customers, manufacturing of the electric fans, and shipping the delivery assists. These play a factor in minimizing the inventory and revenue loss while maximizing the customer satisfaction and profit from Hangzhou plant. The proposed solution incorporates the factors of existing system to implement new process for achieving the objective of the firm.