1. Supply Chain Management Plan
ISCOM424

2. Presentation Outline Review Riordan Supply Chain Diagram
Customer Relationship Management (CRM)
Vendor Managed Inventory System (VMI)
Total Quality Management (TQM)
Standards Conformity Controls
Enhancing Efficiencies
Process Improvement Measures
Collaborative Planning, Forecasting, and Replenishment Process (CPFR)
Rationale of Effective Plan
Team A analyzed the supply chain of Riordan Manufacturing Incorporated (RMI) and in the light of this analysis they gave some recommendations. This analysis and recommendations will be highlighted in this presentation. The team studied the full diagrammatic supply chain and pointed out different areas which should be eliminated from the chain while some other areas need improvement to reduce the cost. The presentation will end with explanation of a few terms collaborative planning, forecasting and replenishment Process and some recommendations.

3. Riordan is operating in US and China and is an integrated multinational company. Their information like all other companies flow from company to plant and back to company through their information system. A fun fact about the company is that its Hangzhou plant in China makes its own forecast estimates about the product material and production. They also collect forecast and feedback from the customers. The whole process from raw materials purchase to delivering the products is carried on according to both company’s own and customer’s forecast. The information management system of the company seems to be very efficient which dispense the information throughout the organization (Riordan Manufacturing Model, 2008).

4. CRM Improvement Recommendations
Applying a Vendor Managed Inventory System (VMI)
Enhances supplier visibility
No need to maintain purchase orders
Lowers down the risk of shortage of production
The Team A recommends RMI to improve its CRM and the whole supply chain system by using Vendor Managed Inventory System (VMI). This system will provide the Vendor with access to the inventory information as well as the need for inventory of RMI with minimum direct communication. This direct access will help the procurement department of RMI not to create and maintain the purchased orders and hence there will be reduction in cost of RMI.
The details of the system will be discussed in later presentation(Fawcett, Ellram, Ogden, 2007).

5. CRM Improvement Recommendations
Implement Total Quality Management (TQM)
Make quality of processes and functions better
Minimize errors in supply chain and production
Make customers more satisfy
Provide better products and
services than customers’
expectations.
The second thing which can be improved in RMI supply chain is implementation of TQM in its practices and processes, recommended by the Team A. The quality of systems, practices and processes is improved in the TQM system by minimizing errors and omissions in the company. Quality of processes and products is emphasized and is important not only to satisfy the customers but to exceed their expectations in order to retain them (Fawcett, Ellram, Ogden, 2007).
(Edraw, 2011)

6. CRM Improvement Recommendations
Make efficient and effective Standards Controls
Applying source checking and
monitoring (inspection) system
Recognize and use “preferred
vendor agreements”
Certificate of compliance
Guarantee of conformity
Minimize on-site inspections
Team A highlights another area for improvement in the supply chain in RMI. Team A suggests RMI to make its standards control and checking and monitoring processes in a way which doesn’t harm or affects the quality of the procedures or products. Source inspection system allows the quality control management to inspect the material or product quality at the supply point before shipping to the company or in case of product to customer. An advance step in supply chain improvement is recognition and use of preferred vendor agreements. A supplier which is supplying material from a sufficient period of time is trustworthy and supplier certificate of compliance can be accepted which means that the material provided is according to specifications. This will be helpful in reducing the on-site checking and inspection of material and will minimize the inspection staff from supply chain to reduce the cost of RMI.
(GTIHEA, 2011)

7. Some Suggestions to increase Efficiencies
Vendor Managed Inventory
Centralized Control
Lowers Internal Cost
Streamline Inventory Control Approach
Make effective Business mergers, relationships and partnerships
OUTCOMES
The VMI system will make the operations and processes of RMI more efficient and effective because the information about the inventory levels of RMI will be accessed directly by the vendor and he will be able to replenish the inventory timely thus saving the time and extra costs of purchase orders. The inventory levels in each division will be minimized reducing the storing cost of RMI. The improved communication in the system will ensure the better customer services, increased product sales and reduction of inventory returns.
Weldon Parts, Inc. is a spare parts producing company for automobile industry in the US at 13 different places. It used VMI to enhance the efficiency of its operations and processes and increase the sales of its products. As company is located throughout the US on different places, it is different in time period, location, sales and products lines.
This company is similar to RMI in the sense that the different divisions of the company don’t have same demand over period of time. When the company applied this system, its sales were improved about 24% and its order time was reduced about 80%. Customer service was better about 99% than the past. When the company used the recommended VMI system’s transfer report, it became easy to calculate inventory on-hand to balance it among the divisions.
If Centralized control is applied in RMI, inventory synergy (combine effect more that the individual effect) can be achieved. Company’s buying power can be increased and purchase of raw material in huge quantities can give discounts and cost can be reduced. VMI system can become easier to maintain when centralized system is implemented.
Effective business relationships can be built when centralized system is implemented. All the divisions can will be benefited when there are good relationships with the suppliers and a sense of a single purpose is developed. Strong relationships can also reduce the conflicts between the divisions of RMI as well as the conflicts with suppliers.

8. “Measures for Process Improvements” Table Example
Vendor
2008 Revenue
2008 Share (%)
2007 Revenue
2007 Share (%)
2006 Revenue
2006 Share (%)
Microsoft
581
6.4
332.1
4.1
176.1
2.7
Amdocs
451
4.9
421.0
5.2
365.9
5.6
John Deer
965
10.6
676.5
8.3
451.7
6.9
Club Car
1,475
16.1
1,319.8
16.3
1,016.8
15.5
SAP
2,055
22.5 (-2.8)
2,050.8
25.3
1,681.7
26.6
Riordan
3,620
39.6
3,289.1
40.6
2,881.6
43.7
Total
9,147
100
8,089.3
6,573.8
CRM explains the way of Riordan betters its business processes and operations for the sectors dealing directly with customers with all other sectors to increase its customers and sales of the products. The purpose of the CRM is to make relationship, increase and improve relationships with customers and search for new customers. This all is done keeping the costs of the organization minimum. The table describes Riordan competitors performance and tells where is the need of improvement using CRM for Riordan.

9. Collaborative Planning, Forecasting, and Replenishment Process (CPFR)
Product flow
Information flow
Collaborative planning
Forecasting (real time)
Replenishment processes
Suppliers
MFG
Dist
Retailer
consumer
Collaborative planning is the flow of information through the whole supply chain. These information are about raw material requirements, production of product, distribution of product and demand of product from the customers. Access of all the supply chain members to a common database and fast and efficient communication are two main factors which contribute a lot in a CPFR program.
There are four major contributors of the supply chain as illustrated in the diagram. They are suppliers to the organization of raw material, manufacturing company, distributing agents and the retailers. The accurate information generation and then communication between all these four contributors is very important for the collaborative system in the supply chain. All the contributors should take part in the planning and manufacturing as well as distributing phases of the product which ultimately will allow the information to flow through the whole supply chain. The information flow will be beneficial in lowering the inventory levels, faster response time and increase in the customers satisfaction.
When information flow freely within the supply chain, it is easy for the supplier to forecast the demand of the manufacturer for raw materials. Moreover, this information flow will make the manufacturer as well as the supplier to develop the required product or modifications in the product as soon as there is a request for modifications or improvement of product from the customer to the retailer and hence providing the customer the product at time. Forecasting the customers demand using real time information makes the whole supply chain to deal with low level of physical inventory which will reduce the storing cost as well as inventory cost and will improve the flexibility of the whole supply chain and processes.
Replenishment processes can be described as the set ups in the whole supply chain in which every contributor of the supply chain puts its contribution and input. For example, manufacturer can play its role by informing the supplier when there is a need of materials in the manufacturing place so-that product can be produced timely. Distributor can contribute by providing information to the manufacturer when there is a need of product in their stores and when there is orders from the retailers for more product. The retailers in response of customer demand will always be in need of replenish their shelves with product.
Wegman’s retail stores and Nabisco in 1998 started the full CPFR program. They improved their supply process by sharing information in the planning process, making real time forecasting and designing replenishment processes faster. This all allowed them to increase their stock rates 96.6 %, reduce the supply chain days 17.7 % and increase their sales about 47%. The free flow of information and effective communication in the supply chain made them to get success for both the companies (parks, 1999).

10. Reasoning (Rationale) for Effective Plan
Applying a Vendor Managed Inventory System
Beneficial for entire supply chain
Implementing Total Quality Management
Emphasize on Customer Relationship Management
Changes and improvements in different areas of RMI supply chain would be included which were recommended by Team A in the logical reasoning (rationale) and these areas are given below.
A VMI system will increase supplier visibility and access to the manufacturer’s need for raw material minimizing the shortage of material for production and there will be no need of purchase orders.
Implementation of TQM system is recommended by Team A in RMI will involve all the management, workforce and the contributors of supply chain to fulfill or exceed the customers expectations by struggling to better the quality of products and processes and reducing the errors in production and supply chain.
The organizations are emphasizing the CRM and improving the supply chain for which they would have to understand the customer needs better, the ways to improve services and improving the supplier’s capabilities. Better communication and technology in the supply chain as well as relationship management will make this logical and rationalized network to perform better and supply chain operations efficiently.

11. References
Blanchard, D. (2010). Supply Chain Management: Best Practices (2nd ed.). Hoboken, NJ: John Wiley & Sons, Inc.
Data Alliance, 9916 Carver Road, Suite 500, Cincinnati, OH 45242, Weldon Parts, Inc. Uses VMI to Improve Efficiency, and Increases Sales, Retrieved from
Edraw (2011) Total quality management flow photo retrieved from
Fawcett, S. E., Ellram, L. M., & Ogden, J. A. (2007). Supply Chain Management: From Vision to Implementation. Upper Saddle River, NJ: Pearson Education Inc...
Gtihea certificate of compliance photo (2011) Retrieved from
Parks, L. (1999). CPFR programs facilitate inventory management. Drug Store News, 21(2), 27. Retrieved from EBSCOhost.
Riordan Manufacturing model. (2008). Retrieved February 13, 2011, from /cist/vop/Business/Riordan/RioMfgHome002.htm