Riordan Phase Three
Riordan has planned to shift its manufacturing plant from Michigan to Mexico to increase the manufacturing capacity and to serve increasing customer base. Company altered its supply chain design which is suitable as per new location. The change in manufacturing plant location require various changes in supply chain design and will have a great impact on existing domestic operations as well as international operations. Riordan is required to closely watch the trends occurring in domestic and international market. They should plan the changes in supply chain design based on the observations.
Domestic Trends:
Major trends, company can observe are in the field of technology, entry of competitors, infrastructure, political-economic conditions, labor rates and distribution system. Company’s policies and strategies are focused on providing customer satisfaction. Thereby an increase in product demand and customer base is expected in domestic market. The entry of new players in the same field is also expected but Riordan will have an upper edge over its competitors due to a well established positive image. The company is having good experience in operations and has a trusted customer and supplier base. Over the period of time competitors will come up with new technology and infrastructure which will help them in providing better product in lesser time and cost. The company needs to be proactive to avoid a winning situation for competitors. Company need to prepare itself in advance, not only to maintain existing customer base but also to add new customers.
A change in political – economical conditions of location can result into changes in taxes, labor cost and distribution cost etc. purchasing power of customers will also lead towards a shift in demand of products which will impact the production of bottles as both are correlated. Technology will play a major role in making distribution chain more effective and quick. The online system will take order in very less time and manage customer effectively.
International Trends:
The possible international trends that company may deal with are related to political stability of particular country, tax and duties, economical condition and consumer purchasing power, availability of raw material and suppliers, cost of labor and logistic arrangements. There are various factors that will impact the Riordan business in international market. Riordan will be delivering its products in different countries and to meet the timely delivery a good supplier base and effective operation management is required.
A good infrastructure is required to support logistic arrangements planned by the company like transport mediums for delivering raw material at the plant location and transporting the final products at customer’s location. Connectivity of the plant location with multiple transport routs will impact the delivery time of the products. The labor cost, working hours, working terms and conditions also varies from country to country depending upon the labor law’s set by the government. The cost to labor and transportation will impact the cost of final product. If international market faces any increase in labor and transportation cost, the cost of Riordan bottles will go up and further it reduces competitiveness of the product. Riordan should implement technology that is advance and able to handle the increased forecasted demand in coming few years till the cost of technology does not get fully utilized.
Trends Impact on Supply Chain:
The supply chain design should be governed by the domestic and international trends that Riordan will be observing. The future operations will be based in Mexico and company will be delivering products in Vancouver, British California and Howard Beach, New York. It is imperative for company to have full control over operations and good coordination among various points of supply chain i.e. production, inventory, distribution, finance, sales etc. Effective on time supply of raw materials may require company to switch from local suppliers to international supplier.
Company can also go for having fully integrated supply chain management system. Integrated system will ensure smooth coordination between companies departments, suppliers and customers. Company need to have strong system to provide good support to customers. In increasing competition customer satisfaction is the key to retain and increase customers. Company is required to equip itself with latest technology and equipments to support future demand and trend. Riordan should be ready to deal with any kind changes in political – economical system of the Mexico as any of such changes will require a quick change in strategy. Company should also have room to deal with any type of cost fluctuation in raw material, transportation and labor.
Conclusion:
Riordan should effectively monitor the trends in domestic and international market. Based on the observation they should change their supply chain design. Riordan can perform well from the new plant if it will have controlled and well coordinated supply chain. Customer satisfaction is a key for business growth and company should have strategy to fulfill all needs of customers and satisfy them.
Reference
P. Kouvelis, C. Chambers and H. Wang. (2006). Supply Chain Management Research and Production and Operations Management: Review, Trends, and Opportunities. Production and Operations Management , 449-469.
