The management team at Riordan has completed a high-level strategic business initiative to improve its supply chain as a competitive advantage to ensure customer satisfaction. After extensive market and financial analysis a decision to create a new line of plastic perfume bottles has been proposed. The following executive summary outlines the business model implementation plan needed to introduce the new product line. Customer Value
Supply Chain Management is about the delivery of a product to a customer in a timely manner regardless of its location of the globe. Providing the right component, the correct quantity ordered, and at the right price is what customers value the most.
To enhance customer value and satisfaction a customer relationship integration team should exist and bring together each facility, its services, and its employees into the CRM process. Integrating the available information of an organization allows employees to have immediate access that may be crucial to a customer’s delivery. Customers value the open visibility of their supplier to track any material that has been shipped.
Strategic Goals, Core Competencies, and Competitive Advantage Riordan’s strategic goals and objectives are to leverage its successful supply chain to integrate easily the production and distribution of the new bottle line. Riordan has the relevant experience and the necessary resources to integrate successfully the new bottle line into our supply chain with the minimum of disruption.
After the integration of the new bottle line is complete, the supply chain will be subject to continual monitoring and improvement. Riordan’s core competency is manufacturing quality plastic products. Riordan’s competitive advantage is the organizational focus solely on quality plastic products. The in-house R&D team means that Riordan possesses the ability to design and produce custom products with low turnaround times.
Riordan’s Brand Reputation
Riordan Manufacturing is wholly owned by Riordan Industries, a Fortune 1000 enterprise with revenues in excess of 1 billion dollars (Riordan Manufacturing, 2012). Riordan is a leading competitor in the polymer materials industry.
Its brand reputation includes plastic beverage containers, custom plastic parts, and plastic fan parts. Most of the customers served by Riordan are automotive parts manufacturers, aircraft manufacturers, the Department of Defense, beverage makers and bottlers, and appliance manufacturers. Riordan strives to exceed industry standards by maintaining rigorous quality controls, innovative solutions, and reasonable pricing.
Supply Chain Strategy
Riordan’s supply strategy is to strengthen the Riordan brands by adopting the next generation of bottling materials using innovative and environmentally friendly products in a effort to become the best global plastics manufacturer in the industry. Riordan also has plans to make their supply chain leaner incorporating ERP systems, TQM and other programs. Riordan has many reasons to strive for excellence in by implementing high-level standards accordingly while maintaining a lean supply chain. One way RMI could increase its visibility and control of quality standards could be to modify its quality inspection process to use source inspection.
Source inspection is when the company has its own quality representatives at the source of supply rather than only locally. Possessing an inspector directly at the supplier, especially those used frequently, allows the company to have a hand in the final acceptance of material against its own quality standards while minimizing the bottleneck of a receiving inspection department at the facility.
Supply Chain Value Configuration
Riordan Manufacturing will create lean a lean value chain to produce and deliver the new plastic perfume bottles to customers. According to “TBM Consulting Group” (n.d.) “The purpose of a value chain is to get the required product or services to the consumer in the most efficient way, on time and with minimum inventory” (para. 2). Riordan will use the Albany, Georgia facility to manufacture the new bottles and continue to use Huffman trucking for the distribution of orders.
The manufacturing plant will order and store material for production based on marketing forecasts. Inventory levels are determined by the supply planning team who will determine the amount of safety stock to carry so the plant can cover orders although not carrying excess inventory. Alternate methods of delivery are employed for the perfume bottles, depending on the urgency of the orders. Orders will have express freight when critical on time shipment is required and bulk train freight if time permits for large noncritical orders.
Supply Chain Proposal and Partnerships
To set up the manufacturing process, Team ‘A’ recommends that Riordan leadership create a team to develop the manufacturing process in the Albany plant. The team will consist of members from Riordan’s Research and Development (R&D) department, marketing and sales department, both the Pontiac and Albany plants, and suppliers. With R&D’s design plans and the Pontiac plant’s knowledge of custom plastic fabrication, those members will provide the technical knowledge in ensuring that the manufacturing process is effectively set up to meet design requirements.
Albany plant team members will understand how to efficiently set up the manufacturing process at the Albany plant and integrate those processes with existing bottle manufacturing processes (University of Phoenix, 2012). Team members from the marketing and sales departments can provide forecasted demand information to help the Albany plant determine cycle time requirements. Cycle time will be set based on demand customer demand requirements using takt time. Takt time is the maximum cycle time allowed to produce a product in order to meet demand.
Takt time sets the pace for production lines in manufacturing and is calculated by dividing available work time per shift by customer demand rate per shift (Breyfogle, 2008). Creating a team to implement the manufacturing design will enable the Albany plant to efficiently meet customer demand with high quality custom designed bottles. The new manufacturing process will significantly contribute to Riordan’s overall supply chain efficiency to deliver the new bottles to its customers on time and at the right value. Distribution Channel
Riordan’s strategy is to target customers who may benefit from using their products designs and services by branding its own abilities. Statements such as these are Riordan’s method of delivering its value to its customers. Riordan must convince the customer Riordan’s products and services will add value to the customer’s product. Riordan Manufacturing is resolute to be the industry leader using polymer materials as a method to solve customer’s issues and goals. The CRM function would enable individual customer requirements to be visible although their flexibility provides added value as well. .
Aligning supplier involvement during the initial development stages of the project is Riordans’ objective. The supplier ability to assign personnel to work with Riordan personnel will enable Riordan and the supplier to collaborate on the design, specifications, and type of material that will provide the customer value. It will also enable the supplier to support Riordan objectives as the personnel develop an effective relationship.
Breyfogle III, F. W. (2008). Integrated Enterprise Excellence (3rd ed.). Austin, TX: Bridgeway Books. Simchi-Levi, D., Kaminski, P., & Simchi-Levi, E. (2008). Designing and managing the supply chain: Concepts, strategies, and case studies (3rd ed.). Boston: McGraw-Hill/Irwin. TBM Consulting Group. (n.d.). Retrieved from http://www.tbmcg.com/consulting-service/lean-value-chain.html University of Phoenix, (2012). Riordan Manufacturing. Retrieved from: https://ecampus.phoenix.edu/secure/aapd/cist/vop/Business/Riordan/Marketing/MIS.asp
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