The performance of Riordan Manufacturing greatly depends on its ability to plan the capacity of production and effectiveness of its supply chain. Its facilities are located in San Jose, Albrany Georgia, and Hangzhou; moreover, this organization has to cooperate with a variety of venders. The Chinese division of the company produces electric fans that can be purchased by clients from different countries.
In order to achieve growth and reduce operational costs, the management of the company should rely on the principles of lean production, in particular the need to decrease the level of inventory and optimize the process of manufacturing. Moreover, Riordan Manufacturing should focus on the time-efficiency of its operations and effective capacity planning. By acting in this way, they can improve their performance.
First of all, the company can estimate the demand for its product and plan its capacity on the basis of sales data collected within the span of several years. Moreover, this organization can obtain information from customers regarding their annual need for fans manufactured by Riordan. Nevertheless, the company also has to determine its demand for materials.
Their major task is to keep the levels of inventory low while avoiding undersupply of stocks. This issue is particularly important because Riordan has to meet the timelines set by customers. It should be noted that Riordan requires various materials, but plastic polymers are probably the most important ones. One of the strategies that Riordan can adopt is VMI or Vendor Managed Inventory.
This model implies that the supplier takes full responsibility for the timely delivery of plastic polymers. This approach can be successful, in those cases when manufacturers implement information systems that provide the suppliers with the information about the quantity of materials that they should deliver.
If this strategy is successfully adopted, Riordan decrease the amount of materials stored at their facilities and avoid delays. However, low levels of inventory are only one aspect that they should focus on.
Secondly, lean production implies that the company can reduce the amount of time to manufacture and delivery the products to the customer. It should be noted that Riordan cooperates with a global courier FedEx and a local Chinese company. They deliver the fans manufactured by Riordan Manufacturing to clients.
The task of the company is to monitor the performance of these delivery companies, especially their ability to adhere to the schedules set by the clients of Riordan. This is another precaution that they should take. In this way, the management of Riordan Manufacturing can gain the loyalty of their customers who rely on the efficiency of the company.
Additionally, the managers of Riordan should look at the steps that are necessary to manufacture a fan. People, who design the process of production, should reduce the movement of workers and equipment across manufacturing facility.
The elimination of unnecessary procedures is another element of effective production, because it enables company to cut operational costs and improve time-efficiency. This is another step that should be taken.
So, Riordan Manufacturing should focus on the following aspects as inventory management, effective work of supply chain, and production processes. These elements are critical for reducing the cost of manufacturing and time-efficiency of the company. The strategies described in the paper will help Riordan Manufacturing become more effective in terms of their organizational performance.