How to Manage Costs in the Manufacturing Process Research Paper

Excerpt from Research Paper :

Riordan Manufacturing, a company that is wholly owned by Riordan Industries, a Fortune 1000 enterprise specializes in the field of plastic injection molding. The business is unique due primarily to Riordan extensive knowledge and expertise with plastic moldings. Innovations in plastic and its uses have created greater demand for Riordan products. Namely, innovations in bottling, auto manufacturing, and National Defense have created an environment for robust growth. Its products currently include 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. Riordan's major customers are automotive parts manufacturers, aircraft manufacturers, the Department of Defense, beverage makers and bottlers, and appliance manufacturers.

Riordan's Manufacturing Initiatives

Riordan forecasts production using an average of the past three years sales. The average is used to help eliminate excessively low or high volumes of sales. In particular, the industry's in which Riordan operates are cyclical. They are characterized by both excessive optimism and mass pessimism. Due to these swings in production volumes and demand, an adjustment to smooth results is required. A three average helps to eliminate market extremes while arriving at a much more accurate
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production forecast. Riordan is also participating in the make to stock system. This system provides flexibility for consumers who require a quick production solution that minimizes turnover times. The companies manufacturing strategy is predicated on a stable workflow that maximizes the cash conversion cycle or CCC. A stable workflow is primarily concerned with lowering employee turnover. Longer tenured associates are often the most productive as they have product and assembly expertise. They also have established strong relationships with customers that can endure for years. Likewise, as plastics become more sophisticated, the workforce must be better trained to properly leverage advances in technology. A hire turnover can therefore be costly, as specialized labor takes long periods of time to cultivate. Through accurate forecasting and low turnover, the company hopes to maintain a very robust cash conversion cycle.

Two metrics that are particularly useful in evaluating performance of the electric fan supply chain is the Cash Conversion Cycle and profit margin. The cash conversion cycle is a widely utilized metric that attempts to measure the amount of time each net input dollar is tied up in the production process before it is converted to cash. This metric is critical for…

Sources Used in Documents:


Cash Conversion Cycle (CCC) Definition -- Investopedia. (2014, January 9). Retrieved from Investopedia - Educating the world about finance:

Chase, R. B., & Jacobs, F. R. (2011). Operations and Supply Chain Management, 13e. Boston: McGraw-Hill Irwin.

Fax Sent From Robert Lord To Mark Neitzel. (2014, January 10). Retrieved from Riordan Mfg.: Home:

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