Riordan Manufacturing employs 550 people worldwide with projected annual earnings of $46 million and operates as a global plastics manufacturer. Riordan Manufacturing, Inc. is one of the industry leaders in the field of plastic injection molding in terms of both total volume and quality. By utilizing the company's state-of -- the art design competencies, Riordan Manufacturing can create innovative plastic designs that are well respected in their applications. Riordan holds its headquarters in San Jose, California, and domestic offices in Albany, Georgia and Pontiac, Michigan. Riordan also has a plastic fan parts facility in Hangzhou, China. The company's production competencies include items such as attention to detail, extreme precision and enthusiastic quality control. Riordan Manufacturing is wholly owned by Riordan Industries, a Fortune 1000 enterprise.
Riordan Manufacturing is in the process of implementing a lean production model in order to eliminate waste, minimize inventory levels and enable suppliers and internal procurement real-time access to ordering, transit, and inventory data. The new procurement process design stands the potential to help streamline the entire organization while reducing overhead and inventory expenses. This strategy will increase the effectiveness of the supply chain. Purchasing and procurement will be able to identify and support the optimal efficiencies for materials required by the production elements of the electric fans for Riordan Manufacturing.
When the company entered the Chinese market, the company decided to locate their China operations in Hangzhou. This location was deemed as ideal because it is closely proximate to corporate partners and the Qiantang River. This location provides quick access to the river which provides an important transportation avenue. Although the plant has operated production processes relatively well using the domestic assets, Riordan has determined that the Hangzhou plant could significantly benefit from an improvement in the supply chain process for its electric fan operations. After much consulting and planning, Riordan has decided to integrate lean production and planning into its new process to further streamline operations and make the factory as effective as feasibly possible.
Material Resource Planning
To support the lean strategy, Riordan will have to implement a material resource planning platform (MRP) to support the lean strategy. A MRP system can automate much of the procurement process and even make suppliers aware of orders so that anyone in the supply chain. In some systems everyone in the supply chain, even external partners, can access the system and check on the status of any of the material movements in the supply chain. This system can serve as the cornerstone of the strategy to effectively implement a functional lean production system at the factory. A lean system reduces inventory levels by ordering materials and supplies as they are needed and MRP can automate this process.
How MRP Works
The MRP system will identify the materials needed for a new production run, identify the inventory that is currently being held in stock, then determine what material will be required to fulfilled to produce the order beyond the current inventory being held can support. The inventory levels can be adjusted in the system and usually a safety stock level of key materials is held as a buffer (Watson, 2012). In a lean production system the safety stock levels will be kept as low as possible to keep inventory levels down.