Riordan Manufacturing Proposal Report: Electric Fans
Introduction
Riordan Manufacturing, Inc is the leading firm in plastics injection molding field. The company is characterized by the creative art in designing plastics which is the company’s innovative skill. The design capabilities of the firm have enabled the company to earn international recognition. Riordan Manufacturing focuses on extreme precision, details, and high quality products which form the hallmark in defining the firm. The manufacturing company has its facilities in China, Michigan, Pontiac, Georgia, California, San Jose, and Albany. These plants enable efficiency and need fulfillment to the unique needs of the customers. The owner of the manufacturing company is one of the Fortune1000 enterprises known as Riordan Industries.
Products
The major products of Riordan are heart valves, custom plastics parts, and electric fans of various sizes, plastic bottles and medical stands. The global plastic manufacturing company has 550 employees who earn $46 million on yearly basis. It earns revenue of $1 billion in excess. The China plant in Hang Zhou specializes in electric fans which are designed according to specific design of the customer.
The goal
Riordan Manufacturing aims to be the leading company in using polymer material to serve the needs of the customers and provide solution to their challenges. To maintain and achieve reasonable profitability, the main focus of the firm is to ensure human and financial capital is present for a growth that is sustainable. For the company’s success, Riordan manufacturing has to have a production plan that is realistic and strong.
Strategic planning
The Chinese business, a plant of Riordan Manufacturing, has facilities near the Qiatanag River. Access to the river leads to Hang Zhou Bay. The bay serves the need of handling the shipping to the company sufficiently. The manufacturing firm has therefore, made a decision to design a supply chain of electric fan to China. For the profitability of the new location in Hang Zhou, Riordan Manufacturing has to develop strategic plan of capacity.
The plan will give an approach to determine the level of overall capacity of resources like equipment, facilities and the workforce size. These are capital –intensive resources which are essential in giving the company’s competitive advantage and longer ranging strategy (Chase, Jacobs, & Aquilano, 2006, pp 46). The capacity level offers Hang Zhou location a critical impact. This is because inadequate level of capacity leads to competitors entering the market and a subsequent loss of customers (Chase, Jacobs, & Aquilano, 2006, pp 55).
Similarly, an excessive capacity leads to price reduction leading to high demand. Other effects are; the presence of excessive inventory, workforce will be underutilized, and there will be minimal profitable products for the company to maintain its competitive advantage (Chase, Jacobs, & Aquilano, 2006, pp 34). Most of the finished products and raw materials in the Hang Zhou operation are shipped through Hang Zhou Port to Shanghai Port before reaching its final destination. Therefore, it could be costly to maintain the continuous shipping from the two bays.
The technique of production
With the reduction of resources required in the production process, Riordan Manufacturing Company prefers to use the lean production technique known as the Just-In-Time to manufacture the electric fans. This technique allows the minimization of supplies and materials, facility space, labor, stock, time, and capital. As a result, there will be general reduction of costs, increase output, and production efficiency. A range of practices will be designed in the lean production technique that will aim at improving quality and productivity as well as waste reduction (Chase, Jacobs, & Aquilano, 2006). The use of JIT technique’s tools and principle, will allow the company to deliver and produce the electric fan in small quantities within a short time to provide the specific needs of customers (Chase, Jacobs, & Aquilano, 2006, pp45).
The JIT approach will therefore, ensure that the products are delivered in the right time and at the right amount to each individual customer. Thus, giving Riordan the power to be sensitive to the demand of customers and to be flexible to their needs. The approach is therefore, beneficial in the attainment of competitiveness through the improvement of efficiency during production (Chase, Jacobs, & Aquilano, 2006, pp 64). This is achieved by minimal use of transport cost, minimal waiting time, and prevention of over-production. Resources will also be saved through the decrease of damaged products, held up stocks, and the capital required by Riordan. JIT approach further provides increased production space to the firm’s facility in China leading to reduced storage needs.
Possible challenges and solutions
The possible challenges expected in the Chinese plant include; language difference leading to barrier in communication. This is likely to occur in the absence of the Assistant Plant Manager who is the only one in management who can speak Chinese. There is also the challenge of extreme weather condition in the region of Hang Zhou Bay where the firm is located. Shipping of company’s products between Shanghai Port and Hang Zhou Port is a tedious exercise especially in queuing in both ports.
To solve the problem of communication barrier, it will be necessary to employ a contract and part-time personnel who is well conversant with Chinese- Mandarin language. The person will be handy in times when the Assistant Plant Manager will not be present. Other qualifications will be language fluency, 1-2 years working experience in management, and should have a background of production. In times of adverse weather condition, truck routes can be used in the ocean region. Such a solution may lead to a lowered cost of shipping during rainy and winter season. Time will also be saved by the use of truck routes because queuing at the docks takes a lot of time.
The Chain of Supply
Various channels of supply are used by Riordan Manufacturing plant in China. The nearest transport location for this firm is Qiantang River that leads to Hang Zhou Bay. The first distribution path will therefore, be the river. Once the products are at the bay of Hang Zhou, then they can be shipped to Shanghais Port. The goods can then be distributed to the company’s plants leading to orders fulfillment.
The JIT approach will help Riordan to cut production and shipping. The amount of labor will be affected when implementing this approach but the firm’s cost will be lowered. Lowered costs will subsequently mean lowered product prices to the customers. Similarly, the supply chain will also be affected by the JIT approach but these adjustments of the normal forms are profitable to Riordan Manufacturing. Current shipping plants and manufacturing will also be affected.
Conclusion
Riordan Manufacturing Company can achieve its success and competitive advantage through lean production technique, evaluation of improvements needs to be done continuously and utilize the Strategic Capacity Plan. By determining the potential challenges, the leading company in polymer materials can come up with solutions of punting into track the supply chain. This makes the company to achieving its desired goals and visions. Riordan manufacturing will therefore, prove that it has the best leadership styles and goals of the organization both in international and domestic level. Riordan Manufacturing will be seen as a company that embraces the future as a leader in the industry of polymer.
Reference
Chase, R. B., Jacobs, F. R., & Aquilano, N. J. (2006). Operations management for competitive advantage (11th ed.). Boston: McGraw Hill/Irwin.
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