Riordan Manufacturing Supply Chain

Topics: Electric motor, Fan, Supply chain management Pages: 8 (1415 words) Published: March 2, 2015

Riordan Manufacturing Supply Chain Design
OPS / 571
Riordan Manufacturing Supply Chain Design
Riordan Manufacturing is a leading global manufacturer of plastic containers, parts, and fan parts. It is solely owned by Riordan Industries, Inc. In 1992, Riordan purchased a fan manufacturing plant in Michigan. The company moved it to China in 2000 where it still resides today. Manufacturing strategy

Riordan’s manufacturing uses a level manufacturing strategy. It helps maintain a stable workforce. Employees benefit from the stable work hours. Surpluses and shortages are absorbed by changing inventory levels and lost sales. This choice of manufacturing is based on the number of fans produced from the sales forecast. Riordan Manufacturing operates an electric fan manufacturing facility with a small consortium of Chinese nationals in Hangzhou, China. The manufacturing facility purchases electric fan motors from a third party supplier and assembles them with plastic parts produced in the facility. Riordan Manufacturing has two primary suppliers, one for the electric fan motors and one for the plastic polymers needed for the injection molding process. In addition smaller suppliers are used for miscellaneous other needs such as cardboard, plastic film, adhesives, ink, solvent cleaners, lubricating oils and mold release agents. These raw materials area all sourced locally and trucked into the receiving area of the facility. When the electric fans are manufactured and packaged the finished goods are typically taken by truck to a port on the Qiantang River and loaded on shipping containers. The containers are barged to Shanghai and place on cargo ships to be sent to their global customers. A flow diagram showing this process can be found below:

The current supply chain is very dependent raw and pre-assembled electric motors that are being sourced by third party vendors. To measure the performance of the vendors Riordan measures the on-time delivery of the electric motors and the safety stock of polymer material needed to maintain production. Currently the electric motors are acquired from a single source, Yin Motor Company, which appear to have some business or family relationship with Riordan’s Chinese business partners. Yin Motor Company is currently providing a 93% on-time delivery of their electric motors and has recently been in the news because of poor working conditions, low wages and not compensating employees for working longer hours in their facility. Yin Motor Company is located in Zhejiang, China with approximately 400-500 employees and based on the recent news is currently not a stable supplier. Riordan has looked for alternate sources to minimize the risk and improve on-time delivery of their motors. In lean production manufacturing, companies attempt to be more efficient and productive in an attempt to be more effective in their spending, minimize waste and eliminate unnecessary steps within the manufacturing phase. Lean production principals are a “set of activities designed to achieve production using minimal inventories of raw materials, work-in-process, and finished goods. Parts arrive at the next workstation “just-in-time” and are completed and move through the process quickly. Lean is also based on the logic that nothing will be produced until it is needed” (Jacobs & Chase, 2011, p. 419). As it relates to Riordan Manufacturing China plant, components of lean principals can be found for instance all of the fans are manufactured and shipped out of one plant. This is where components are assembled and molded together in a “group technology” setup. This is to minimize the time and resources used between assembling of the fan components. Although Riordan has lean components integrated in their manufacturing, one are of concern would be the electronic motors that are purchased from a supplier and that they have not been able to meet the demand in some cases. This would interfere with the...
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