Running Head: Riordan Manufacturing

Riordan Manufacturing
Tiffany Poppe-Myhre, Tierney Kennedy, Tyeisha Humphrey, Yadira Desvergunat
OPS/571
January 31, 2015
Professor Gregory Waters

Riordan Manufacturing

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Riordan Manufacturing

Riordan Manufacturing Strategy

Riordan Manufacturing utilizes the level strategy based on its inventory management.
This strategy will ensure consistency in operations, manufacturing and delivery of its products.
The plant's business is make-to-stock in which the future demand for fans is forecasted based on
taking the average sales for the last three years and estimating the next year. The assumption in
using this forecasting method is that history will repeat itself within manageable limits (Riordan
Manufacturing, 2013). Riordan has a strategic goal of reaching $50 million revenue mark within
two years. They plan on utilizing its staff and front line managers in order to reach this goal.
This is where the benefits from the level strategy will be most important. The level strategy
maintains a stable workforce, working at a constant output rate. Shortages and surpluses are
absorbed by fluctuating inventory levels, order backlogs, and lost sales (Jacobs & Chase, 2011).
Employees in a level strategic manufacturing facility benefit from stable work hours at the costs
of potentially decreased customer service levels and increased inventory costs. Additional
concerns are the possibility that products held in inventory run the risk of becoming obsolete
(Jacobs & Chase, 2011). By having inventory on demand and an aggressive sales approach with
a full staff, Riordan will be able to meet its customers needs, setting them apart from any
competition

Process Flow Diagram

Riordan Manufacturing

INPUTS:Purchased Electric
Motors, Purchased Plastic
Polymers, Molds

Prepare Inputs

OUTPUTS: Finished
Electric Fans

Manufacturing of Electric Fans

Obtain Purchased Electonic

Motors, Polymers From Inventory
Prepare for Manufacturing

Have All
Inputs?

NO

Unable to Manufacture
Fans

YES
Obtain, Purchased Motors, Polymers from Inventory
Manufacture and Package
Fans

Melt Plastic
Polymers at Required
Temperature

Fan Blades Produced

Inject Polymers Individual

Molds and Machines

Plastic Fan Housings Produced

Assemble Finished
Product (Electric Fans)

Electronic Motors
Package Electric Fans

Fans Stored in Finished Goods

Stockroom

Sell Electric Fans

Customer Pickup
Chinese Shipping
Company Delivers
Domestically
Chinese Shipping
Company or Fed Ex
Used Internationally

Evaluate Performance
Supplier Relationship

Lean Production
Lean Production principles are used to maximize the efficiency of the electric fan
production with Riordan Manufacturing. Lean production focuses on customer value by

Riordan Manufacturing

eliminating waste. Riordan will manage lean production through continuous improvement with
purpose, process, and people. Riordan Manufacturing has production plants in Georgia,
Michigan, and China so processes and the lean culture must be consistent in each plant for
operational success. Electric fan parts are produced in Hangzhou, China. Purpose is why the
organization exists. Riordan has committed to focus on what the customer desires from the
electric fan product and what strategies will produce the results. Process focuses on how the
work gets done. Are the processes at the manufacturing plants efficient? Are the electric fans
free of defects and produced timely? Riordan monitors processes through visual management,
process mapping, and focus groups. Finally, people make the production happen. Employees
are in charge of the production and maintain the Riordan culture. These steps are completed
through developing operational plans and tactics, leading change, and encouraging
communication and development with all employees.

Business Forecasting
Riordan Manufacturing will use qualitative and quantitative business forecasting for
electric fan production. When forecasting, a good strategy is to use two or three methods and
look at them for the commonsense view(Chase, Jacobs p. 517). Riordan Manufacturing is a
large corporation with facilities in America and China, forecasting should be done through
multiple techniques to make appropriate decisions. The first form of forecasting will be timeseries analysis. Riordan will use the time-series analysis technique to forecast sales for the future
by reviewing past data. The time-series technique will be used every six months for a mediumterm review to focus on seasonal effects and long-term trends. Reports will be monitored

Riordan Manufacturing

quarterly through sales revenue. Data will also be collected on inventory, production, and
demand forecasting through Collaborative Planning, Forecasting, and Replenishment (CPFR).
How fast are the electric fans selling? Is there a way to influence the demand? CPFR will
integrate all business partners in the supply chain, manufacturing, distribution, and retail.
CPFRs objective is to exchange selected internal information on a shared Web server in order
to provide for reliable, longer-term future views of demand in the supply chain(Chase, Jacobs p.
543). Riordan will enable this process through front-end partnership agreement, joint business
planning, development and sharing demand forecast, and inventory replenishment. Riordan is
mainly a plastic supplier and manufacturer for the electric fans and involving partners in retail
and distribution will strengthen sales and demand forecasting.

Sales Forecasting
Riordan Manufacturing has a 50 million sales plan goal. This will be achieved through
increased sales to existing customers and expanding sales to new customers. In order to meet
this sales goal with the electric fan products, Riordan will use marketing, timing, and promotion
strategies. These tactics are forecasted through data collected from the time-series analysis and
CPFR. The time-series analysis will tell Riordan what quarters have the highest sales and when
seasonal promotions are necessary. This data will allow Riordan to adjust prices to meet
required profit margins. The CPFR strategy will enable Riordan to work with electric fan
partners on sales promotions and marketing. Business partnerships in retail and distribution will
allow for a larger outreach in marketing and sales promotions that will increase revenue for both
parties during slower quarters.

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Aggregate Production Plan

Riordans China plant is current running based on the climate and the quantity of fans
that will be produced. A local Chinese company furnishes Riordan with electric motors for the
fans and manufactures the amount based on Riordans forecast. However, the local Chinese
company has not been successful and only delivers 93% of the product requested each time.
Riordan will need to look at other businesses to provide additional motors and meet company
needs for the forecasted demand.
Based on experiences, Riordan will need to consider another fan motor company to keep
a make-to-stock operation. This operation provides a potential sales forecasting based on an
average of sales for the past three years and future year projecting sales. This operation will also
allow a competitive market for manufacturing and product delivery. Another consideration
Riordan can take is to keep additional stock on hand to satisfy an unexpected peak order. Riordan
does not currently have stocked fans and cannot even cover warranty issues and depend on the
current supplier to have product readily available. The plastic polymer is currently stocked,
which is used in electric fans, Riordan may choose to reduce this stock item and stock the more
in-demand motor. These changes will result in cost savings and help Riordan stay prepared for
customer service and delivery issues.

References

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Chase, Richard. & Jacobs, Robert. F. Operations and Supply Chain Management/Edition 13
March 2010. Retrieved from:
https://online.vitalsource.com/#/books/9781121899308/pages/77477370
Riordan Manufacturing. (2013). Riordan Manufacturing. Retrieved from
https://ecampus.phoenix.edu/secure/aapd/CIST/VOP/Business/Riordan/index.asp
University of Phoenix. (2013). Riordan Manufacturing. Retrieved from University of Phoenix,
OPS 571 website.