Riordan Supply Chain Proposal Package

Riordan Supply Chain

Proposal Package for Riordan's Global Supply Chain Management

Riordan Manufacturing is a global plastic injection firm based in the United States. It specializes in the production of industrial materials and consumer items such as electric fans. This focus has required it to seek labor contexts in the global market where it can keep production costs down while simultaneously producing the fan motors needed to make final assembly of its product. Its manufacturing plan in Hangzhou, China is the primary point of production for the fan motors, and therefore the American facilities rely on the production and shipping schedule in Hangzhou in order to carry out fan assembly and marketing. This dependency is creating a supply-chain bottleneck due to an unacceptably high level of later delivery.

MRP:

The shipping schedule and inventory maintenance in Hangzhou are administrated by a Material Requirements Planning (MRP) software program. Indeed, according to an internally maintained weblog on the subject, this type of global supply chain management creates a need for "special software developed by the manufacturers in the planning and scheduling tasks of the company. It shows the orientation between the various requirements and the progress in the manufacturing sector, so that more accuracy in the delivery dates." (Riordan Manufacturing, 1) Unfortunately, the current bottleneck calls the MRP approach into scrutiny, suggesting that opportunity is being lost for Riordan's domestic markets, which experience production delays while waiting for fan motor imports to arrive.

New Process Design:

Based on the difficult tenor of the marketplace and the fact that Riordan is yet posed for continuing growth, this is a clear time for Riordan to seize the opportunity for a necessary transformation. The company can ill afford to abide these productivity losses if it is to justify the cost-cutting measures of engaging production operations in China. However, this is not to suggest that its process design should be dramatically altered at this juncture. Instead, adjustment is simply needed. At first forays into globalization are showing Riordan as a company with the capacity to benefit significantly from lowered labor costs, but it must also balance this with greater inventory assurance on the domestic front. This denotes the need for the recommendation made here, which calls for Riordan to raise its import rate and inventory stocking of the Chinese made fan motors. The cost could be offset by reconsidering the inventory which it has kept with respect to plastic polymer, which is produced nearby and available quickly where necessary. The figures driving the MRP delegation of shipping and production schedules must be altered to reflect a greater inventory focus on fan motors and a more need-basis supply chaing where the plastic polymers are concerned.

Global Supply Chain:

Industrial manufacturing is a trade which has gained increasing ground as a launch-pad for participation in the globalization of production and resource exchange. Riordan is a suitable example. A leading firm in its field, and already boasting locations that while not numerous, are at least in settings that are quite distinct from one another, Riordan's production and contracting operations have already been subjected to cultural adaptations and expansion. However, as it works in foreign production markets like China, Riordan must remain conscious of its strategy capacity for output of its product and for the input of the resources required for this product. Establishing this balance means determining the pace at which the company should import and stock fan motors as these relate to peak and slow sales peariods for the seasonal product line. This is to say that at this juncture, Riordan's priorities are in an expansionist strategy whereby it must maintain a substantial stock of the necessary resources in order to attend to a long-term effective capacity. The increased output required for an expansionist strategy means that Riordan is focused today on a design capacity that is based upon the different needs reflected in different market places. In the U.S., the 7% delay on a 93% delivery proficiency means that market demand remains ahead of supply. A new inventory and warehousing emphasis in America could significantly alter this predicament.

Clearly, in operations contexts such as the United States, where Riordan is already entrenched as a reputable source for commercial plastics, its actual output will have achieved a symbiosis with the design capacity such that this output is something in the range of 75% of the anticipated design capacity during peak sales seasons for fans.

Conclusion:

In determining a strategic capacity for increased focus on inventory and warehousing, its effective capacity must also account for variables of cost in terms of facilities, labor, environmental regulatory adherence and a projection for the estimated space of time which is used to account for the consumption of certain resources and to mark a point at which it is necessary to replenish these resources.

Cover Letter:

Dear CEO . . .,

I am pleased to report that Riordan is handling the challenges of the global market admirably and boldly. Indeed, its production operations in Hangzhou, China reflect a positive, ethically responsible and quality-driven global manufacturing strategy. Still, as we move into the next decade of global supply chain management, there are opportunities to significantly refine the opportunities to be had therewith.