This paper examines how Riordan Corporation can improve its supply chain management by adopting Just-in-Time (JIT) delivery and the kanban bin resupply method. The paper argues that contracting with multiple local motor suppliers, when paired with JIT practices, can reduce procurement, storage, and carrying costs while increasing production capacity. It further explains how the kanban method — well-suited to Riordan's low-differentiation parts such as fan blades and motors — can support a shift toward on-demand, customer-order-based production. Together, these lean manufacturing techniques are presented as practical tools for improving overall throughput and profitability across Riordan's supply chain.
Effective supply chain management is an essential part of redesigning the processes engaged in by the Riordan Corporation and of making the overall throughput of the manufacturing concern more efficient. The decision to contract with multiple local providers for the motor elements needed in Riordan's fans could present substantial savings and a capacity increase for the company, but it could just as easily lead to disastrous problems if not properly controlled. Using the processes and practices of Just-in-Time delivery and the kanban system of resupply will help the company maintain proper control over its supply chain, improving performance through effective outsourcing rather than damaging capacity and customer relations.
Just-in-Time delivery achieves the desired purpose of modern supply chain management: reducing inventory and thereby lowering or eliminating warehousing and carrying costs, freeing up company resources for other endeavors or simply creating greater profitability (Anderson, n.d.; Borgstrom & Hertz, 2011). Riordan can utilize Just-in-Time delivery methods from local suppliers of its motors to reduce its own costs of motor procurement, storage, and overall manufacturing by ensuring on-demand production and delivery capabilities spread across close-proximity suppliers. Because there is not a high degree of differentiation in the motors Riordan requires, Just-in-Time delivery practices combined with the kanban bin method of resupply should also create added efficiency, cost savings, and enhanced profitability by lowering carrying costs (Anderson, n.d.; Borgstrom & Hertz, 2011).
"Kanban suits low-differentiation parts and on-demand production"
Riordan Corporation has many ways in which it can move toward leaner production methods. Achieving a more efficient and effective use of the supply chain is one of the most impactful. Utilizing Just-in-Time delivery and kanban resupply methodology will go a long way toward creating supply chain efficiency and positioning Riordan for greater long-term profitability.
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