Supply Chain Design
Amanda Champion, Andrew Day, Heather Wiggins, Katrina Caver, Yvonne Tagle Jauregui
April 25, 2016
W. Pearl Maxwell
Supply Chain Design
Riordan Manufacturing is considered one of the leading manufacturing companies. They produce plastic containers and parts for fans. The company was owned from a prior company called Riordan and it was purchased when it relocated to Michigan in 1992. About 8 years later it moved to China in which is now where the headquarters are today. In order for Riordan to run smoothly the company forecast the production using the average from the past three years and using the make-to-stock system. This system benefits the customer ...view middle of the document...
Keeping over production as inventory allows the inventory to be depleted when the demand is forecasted to be high.
Process Flow Diagram
The following are two process flow diagrams for electric fans.
Stock Fan Process:
Custom Fans Made to Order:
There are two particular metrics that can be used to evaluate the performance. The two metrics are the cash conversion cycle and the direct material received on time. The cash conversion cycle is a cash flow calculation that attempts to measure the time it takes a company to convert its investment in inventory and other resource inputs into cash. In other words, the cash conversion cycle calculation measures how long cash is tied up in inventory before the inventory is sold and cash is collected from customers ("Cash Conversion Cycle", 2015). The reason that we choose the direct materials as another metric is because with this aspect it can be easily identified with the unit of production.
Supplier Relationship and the Effects on the Supply Chain
The supplier relationship that Riordan has will be within the plant in China by the company called Yin Motor Company. Since they purchase most of their products from this supplier it is very important to carry a well-rounded relationship with this particular supplier. Although a good relationship with this company is important, there are some concerns that have come about with the Yin Motor Company. The first concern with the company is that Riordan has gotten word that their employees were going on strike. This can affect the supply chain in a major way because the stability of Yin Motor Company will be affected financially. There will be no workers which will slow up the process for Riordan getting the products needed to continue to perform the way they have. Overall negotiations should be set up with this particular company while Riordan should seek other resources to start getting supplies from within the Chinese region. The goal is to strengthen Riordan’s overall supply chain. Taking these necessary steps will help get there as long as things are done properly and on time.
Lean Production Principles
For lean production principles has five basic steps:
1. Identify value
2. Map the value stream
3. Create flow
4. Establish pull
5. Seek perfection (Lean Enterprise Institute, 2000).
For identifying the value, this would refer to what the product is and where the standpoint of the end customer is located. This would mean for Riordan to determine what value their fan parts would mean for the customer and determine demand requirements. Mapping the value stream would be the second process, referring to figuring out the value stream, and determining what steps can be eliminated based on what stages add value to the process. For Riordan this would mean to figure out what does not add value to their product. If it does not add value then it needs to be eliminated. Creating a flow chart refers to creating a flow...