Essay: Operation Management Riordan - Supply Chain

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Operation Management

Riordan - Supply Chain Management Case Study

Manufacturing Strategy

Riordan Manufacturing's plant in Hangzhou, China, is responsible for the manufacture of fans. The current process for the manufacture of the firm starts with the firm manufacturing the plastic parts which are needed out of polymers, which are then assembled with the motors. It is stated that the orders are sent to the shipping department where the orders are assembled and sent out. This would indicate that the firm is following a level strategy, where goods are manufactured and held in inventory until they are ordered (Buzzacot et al., 2012). The alternate is a chase strategy; this is best used where a firm faces a high level of variability, as the goods are only produced as needed (Buzzacot et al., 2012).

Riordan have a range of fans that are sold, but the firm also provides some custom made fans, this is possible as the firm manufactures the plastic components themselves out of the polymers. For these fans the production process must be a chase process. Riordan are currently using a combination of level and chase inventory management strategies.

Process Flow Diagram

The supply chain starts with the Chinese suppliers. The firm orders goods based on the sales forecast, with the orders going to local Chinese suppliers. The orders are placed and the goods are received. When the goods arrive the orders are checked against the order, and, as long s they are correct, the raw input materials are placed in the holding area, ready to be sent to the factory. From here the materials are in the internal supply chain, going through the manufacturing process until they are sent to the shipping department, where the orders are sent out using third party logistics suppliers, although some customers may come and collect their fans. The process is shown below.

Figure 1; Process flow chart

Metrics

Metrics may be used to assess the efficiency of the supply chain. In order to measure the efficiency of the supply chain one metric which may be used is the level of on time supplies. At the current time it appears that there is a little difficulty in terms of the suppliers, as only 93% of the deliveries are received on time. If there are delays in the supply chain they have the potential to interrupt the production, waste resources, and if there is not sufficient buffer inventory, or if the order is for custom fans, there may be a delay in the delivery of the order, which in turn may create dissatisfaction in the customers. The metric which may be utilized in the supply chain may be linked to delivery quality and accuracy, measuring the level of goods which need to be returned or rejected, seeking to have a level which is as low as possible.

Influence of Supplier Relationships

The relationship that a firm has with its suppliers will impact on the way that the supply chain performs. There are a number of different influences, which ultimately work in conjunction with each other. However, to appreciate the potential impact, some of the major influences will be considered separately.

The first influence will be the type of relationship that is present. Where a firm has a long-term relationship with a firm, either it is with a long-term fixed contract, or a high trust relationship where it is understood orders will be placed at regular intervals, the supplier is likely to ensure that they have… [END OF PREVIEW]

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