Riordan Manufacturing

A Business Proposal to Reduce Waste, Increase Energy Efficiency,

and Raise Profits1

Prepared for
Kenneth Collins
Senior Vice President, Research and Development
Riordan Manufacturing

Prepared by
Caitlyn Gartz
Vice President, Marketing
Lunsford Environmental

June 10, 2010

Proposal Number: RM09-01

This is a fictitious proposal created for a fictitious company. The statistics, facts, and
figures, while based on somewhat realistic assumptions, are not real. This proposal and its
entire contents have been artificially created for demonstration purposes.

Riordan Manufacturing: A Business Proposal

Riordan Manufacturing
A Business Proposal to Reduce Waste, Increase Energy Efficiency, and Raise Profits
Executive Summary
Background
Riordan Manufacturing, Inc. is a global plastics manufacturer employing 550 people with
projected annual earnings of $46 million. The company is an industry leader in the field of
plastic injection molding. With state-of-the art design capabilities, Riordan Manufacturing
provides innovative plastic designs that have earned international acclaim. The company is
wholly owned by Riordan Industries, a Fortune 1000 enterprise with revenues in excess of $1
billion. Its products include plastic beverage containers produced at its plant in Albany, Georgia;
custom plastic parts produced at its plant in Pontiac, Michigan; and plastic fan parts produced at
its facilities in Hangzhou, China.
Currently, Riordan Manufacturing is in need of company-wide consultation services, including
the analysis and evaluation of energy performance. Because of rising energy costs, Riordans
profits have been steadily declining since 2004. This reduction in profits has been largely the
result of increasing energy costs associated with manufacturing processes that require a large
amount of energy. Undergoing a comprehensive review and systematic energy evaluation process
will position Riordan Manufacturing to implement effective methods of decreasing energy costs
and place into operation environmentally sound practices.
Objective
Riordan Manufacturing is in need of expert consultation services that provide research data,
expert analysis, and data-driven recommendations designed to improve energy efficiency and
increase environmental protection. Due to the increasing costs associated with energy-dependent
industries, Riordan Manufacturing must find ways to improve energy efficiencies using datadriven, performance-based recommendations.
Goals
Riordan Manufacturings research-and-development programs are conducted at the corporate
headquarters in San Jose, California. Based on production capabilities and market demands,
Riordan Manufacturing leaders then assign production quotas to each of the divisions around the
world. These quotas are presented to each division in the form of sales and production goals
based on current and expected contracts with a variety of customers. Riordan Manufacturings
major customers are automotive parts manufacturers, aircraft manufacturers, beverage makers
and bottlers, appliance manufacturers, and the U.S. Department of Defense. These customers
expect the attention to detail, extreme precision, and enthusiastic quality control that are the
hallmarks of Riordan Manufacturing. To continue to meet the needs of existing customers with
quality products and services, Riordan Manufacturing now requires consultation services that
provide specific programs, policies, and procedures designed to increase energy efficiency and
reduce waste. These consultation services can be encapsulated in four primary goals:
Measure and document current energy usage

Riordan Manufacturing: A Business Proposal

Review overall heating, cooling, and ventilation requirements

Inspect and evaluate all energy-consuming machinery and processes
Create and implement an aggressive environmental compliance program

These goals will guide Lunsford Environmental, Inc. as we provide research data, expert
analysis, and data-driven recommendations designed to improve energy efficiency and increase
environmental protection for Riordan Manufacturing. With these goals in mind, Lunsford
Environmental will create a comprehensive program and provide specific written
recommendations to help Riordan Manufacturings facilities around the globe achieve increased
energy efficiency, reduce waste, and become more environmentally friendly.
Methods
Lunsford Environmental provides expert consultants who have expertise, training, and
experience in a wide variety of professional arenas. Based on the experience and knowledge of
our team members, Lunsford Environmental relies on an organized and professional teamwork
approach to research our clients needs. We focus our efforts in two primary areas: First, we use
the most sensitive and technologically advanced equipment available on the market today. Our
measurements are designed to provide clients with highly specific information that can achieve
substantial cost savings when applied to large-scale companies such as Riordan Manufacturing.
We meticulously scour every aspect of your operating procedures and examine all areas of
energy usage. Second, we rely on valid and reliable human resources metrics (various employee
assessments, structured interviews, etc.) to gather important information from employees about
the companys operating procedures at every level. Together, these two approaches help us
provide our clients with best-practice recommendations based on a thorough review and
evaluation of company processes.
Costs
The following table presents an initial estimate of costs.
Table of Estimated Costs
______________________________________________________________________________
Initial Monitoring and
Information Gathering
Units
Rate
Total Cost ($)
585 hrs.
$56 hr. (avg.)
$32,800
______________________________________________________________________________
Evaluation and Diagnosis of
Company-wide Energy Efficiency
Units
Rate
Total Cost ($)
440 hrs.
$55 hr. (avg.)
$24,175
______________________________________________________________________________
Consultation for the Implementation of
Energy-efficient Alternatives
Units
Rate
Total Cost ($)
445 hrs.
$58.50 hr. (avg.)
$26,000
______________________________________________________________________________
Total Project Costs
$82,975
______________________________________________________________________________

Riordan Manufacturing: A Business Proposal

Market Forecast
Energy-reliant companies are facing increased competition within our global economy. This
competition will increase the pressures on companies to perform more efficiently, especially
within the environment of todays national and international economic slowdown. Economic
conditions have resulted in downsizing, outsourcing, and repurposing human resources in every
organization at every level. As companies respond to these challenging circumstances, energy
management has become an important way that costs can be leveled or reduced and that profits
can be increased, providing a foundation for a growing economy and stability in an uncertain
market. Lunsford Environmental is well positioned to ensure that companies like Riordan
Manufacturing take the appropriate steps to continue its role as a leader within the plastics
manufacturing industry.

Riordan Manufacturing: A Business Proposal

Riordan Manufacturing
A Business Proposal to Reduce Waste, Increase Energy Efficiency, and Raise Profits
Introduction
Lunsford Environmental, Inc. would like to thank Riordan Manufacturing, Inc. for the
opportunity to respond to the request for proposal (RFP) issued on March 24, 2010. We have
gathered information during the past four weeks about your company and have worked with
many of your outstanding personnel. Particularly helpful were the payroll and human resources
departments, as they provided extremely helpful information about your current energyconservation practices and associated energy costs. Your environmental engineering department
also provided timely and accurate information that was instrumental in our efforts to respond
effectively to your RFP. As a result of teaming with various departments within Riordan
Manufacturing, our project team at Lunsford Environmental is pleased to present the following
business proposal.
Background
As you are aware, energy costs are increasing at phenomenal rates. In fact, many companies
operating within energy-dependent sectors spend as much as 75% of their operating costs on
energy-related products, some even more (see Figure 1). Some companies have seen energy costs
increase more than 250% during the past decade.
Average Percentage of Energy Costs for U.S. Companies

Figure 1. On average, energy-dependent companies spend a large portion of

their budget on costs associated with energy and the manufacturing process.
In response to these rising costs, an increasing number of national and international companies
are taking steps to improve energy efficiency. These companies have realized that exploring

Riordan Manufacturing: A Business Proposal

ways to reduce waste and increase energy efficiency is not only environmentally friendlyit is
also good business.
As of today, hundreds of companies across the United States and around the world are looking
for ways to attract and retain methods that provide sustainable energy (see Figure 2). These
companies are looking to solar power, bioenergy, geothermal energy, wind power, and
hydropower as ways to help lower their energy costs and increase their profits. According to one
report, General Electric has a division dedicated to alternative energy. Citicorp announced last
year that it had allocated $50 billion for environmental investments. Nike is changing the way all
of its products are made by using eco-friendly materials . . . .2 These global leaders have
committed human resources, financial resources, and intellectual resources to the exploration of
alternative forms of energy, and they lead the way in helping our nation reduce its dependence on
foreign energy.
Percentage of Fortune 1000 Companies Exploring Alternative Energy Sources

Figure 2. During the past 35 years, an increasing percentage of Fortune 1000 companies have
begun to explore alternative sources of energy.
This movement toward alternative energy sources represents just a few of the changes taking
place in our global environment. Large corporations, retail chains, and even independently
owned establishments are starting to embrace eco-friendly alternatives, and we are pleased that
Riordan Manufacturing has allowed Lunsford Environmental an opportunity to provide
consultation services to help take the next step.
2

Small steps toward solving a huge problem. (n.d.). Retrieved June 05, 2010, from
http://www.thesandiegocoast.com/?p=1995

Riordan Manufacturing: A Business Proposal

Proposed Action
Our first step is to review your organizational operations from a systems perspective. Many
energy consultants provide suggestions, but without a complete review of the ways Riordan
Manufacturing operates on a company-wide basis, important energy-saving processes could be
overlooked. A complete systems analysis will also allow Lunsford Environmental to examine
Riordan Manufacturings energy use throughout its entire scope of operation, not just at one
facility or division. The process starts with a comprehensive, diagnostic assessment of Riordan
Manufacturings current energy usage and environmental compliance strategies. These
assessments include the following:
Initial monitoring and information gathering
Evaluation and diagnosis of company-wide energy efficiency
Consultation for the implementation of energy-efficient alternatives
We will construct tailored surveys designed to elicit critical and targeted company-wide
information from your first-line employees, middle managers, and executive officers. These
surveys will help us determine the most appropriate recommendations based on best practices in
human resources management. Preliminary research findings suggest that significant energy
savings could be realized by implementing, in part, the following alternative energy platforms:
Solar power
Thermal power
Wind power
Hydroelectric power
These procedures represent just a portion of the extensive diagnostic procedures Lunsford
Environmental will implement to identify opportunities for Riordan Manufacturing to increase
energy efficiencies.
Once Lunsford Environmental has comprehensively reviewed Riordan Manufacturings
operating procedures and identified opportunities to increase energy efficiency, we will provide
you with a comprehensive, quantitative, easy-to-read report explaining the diagnostic procedures
we conducted as well as the results of our analysis. Based on our findings, you will receive an
environmental friendliness rating (EFR), which will rank your organization on a scale from 5
(very environmentally friendly) to 1 (environmentally unfriendly). This report will also provide a
percentile ranking for your organization, situating it in relationship to other similar organizations
regarding energy usage, energy costs, and energy efficiency.
Lunsford Environmentals second step will be to provide specific recommendations for each of
your operating units. Based on our review of the companys San Jose, California, operations,
Lunsford Environmental can provide estimates for the companys plastic beverage containers
plant in Albany, Georgia; its custom plastic parts plant in Pontiac, Michigan; and its plastic fan
parts plant in Hangzhou, China. Because we provide exclusively designed systematic processes
for monitoring, analyzing, and evaluating your companys energy efficiency, Lunsford
Environmental is able to provide Riordan Manufacturing with a comprehensive and tailored plan
of action to improve the energy efficiency and environmental friendliness on every floor of every
building in every facility of Riordan Manufacturing.

Riordan Manufacturing: A Business Proposal

After our team of experts reviews your organizational operations from a systems perspective and
provides specific recommendations for each of your operating units, we will help Riordan
Manufacturing implement and monitor the energy-saving procedures we have recommended in
this proposal. Although many consultation firms provide recommendations, Lunsford
Environmental takes the process one step further. Our highly qualified and experienced team of
experts will provide purchasing support for all your energy-efficient equipment needs,
technological support for all hardware and software installations at all locations, electrical and
mechanical engineering support for equipment installations, executive communication support,
and general troubleshooting support for problems that may arise. In short, Lunsford
Environmental will provide all the services you will need to make improvements in your
operationsimprovements that are guaranteed to reduce energy consumption and lower costs.
Costs
The following table presents an initial estimate of costs.
Table of Estimated Costs
______________________________________________________________________________
Initial Monitoring and
Information Gathering
Units
Rate
Total Cost ($)
______________________________________________________________________________
Review of heating, cooling, and
ventilation requirements
150 hrs.
$45
$6,750
Evaluate boilers, heat pumps, and furnaces
95 hrs.
$55
$5,225
Review thermostat efficiency
45 hrs.
$60
$2,700
Inspect and evaluate air conditioner
size and cooling capacity
45 hrs.
$60
$2,700
Inspect supply and exhaust ventilation system
Inspect and evaluate lighting needs
Locate direct and indirect air leaks on all
exterior windows and doors
Survey and interview front-line employees,
managers, and executives

75 hrs.
45 hrs.

$60
$60

$4,500
$2,700

45 hrs.

$60

$2,700

85 hrs.

$65

$5,525

Subtotal:
$32,800
______________________________________________________________________________
Evaluation and Diagnosis of
Company-wide Energy Efficiency
Units
Rate
Total Cost ($)
______________________________________________________________________________
Review and evaluate high-efficiency and
energy-efficient lighting
150 hrs.
$45
$6,750

Riordan Manufacturing: A Business Proposal

Review and evaluate geothermal,
wind, and solar alternatives
Review and evaluate boiler,
heat pump, and furnace efficiency
Review thermostat efficiency
Provide utility audit

100 hrs.

$65

$6,500

95 hrs.
45 hrs.
50 hrs.

$55
$60
$60

$5,225
$2,700
$3,000

Subtotal:

$24,175

______________________________________________________________________________
Consultation for the Implementation of
Energy-efficient Alternatives
Units
Rate
Total Cost ($)
______________________________________________________________________________
Provide comprehensive and detailed
documentation and recommendations
75 hrs.
$60
$4,500
Provide guidance and support throughout the
implementation process
250 hrs.
$50
$12,500
Provide meter verification through
exclusive Internet format (setup)
45 hrs.
$75
$3,375
Install online automated utilities payment system 75 hrs.
$75
$5,625
Subtotal:
$26,000
______________________________________________________________________________
Total Project Costs
$82,9753
______________________________________________________________________________
Note: This estimate includes financial information based on an initial review of Riordan
Manufacturings San Jose corporate offices. It is based on information from the corporate offices,
and although we expect these estimates to remain consistent throughout the companys additional
manufacturing units, actual cost may vary once the consultation process begins. As a cost-saving
option, the services in this table may be purchased on an as-needed basis.
Closing
Lunsford Environmentals experienced and professional team of environmental technologists,
engineers, organizational management professionals, and eco-accountants will conduct a
complete and thorough analysis of your companys energy use, environment-impacting
processes, and energy-conservation procedures. From streamlining your supply chain to
enhancing your distribution channels, Lunsford Environmental will help Riordan Manufacturing
realize economic efficiencies that formerly have been overlooked. Together, our team of
professionals has more than 150 years of combined experience in helping companies just like
yours reduce environmental impact and increase energy efficiency.
If you would like to accept the terms provided in this proposal, please provide your authorized
signature in the space provided below and date the form. Please return this signature page with a
3

Figures in this table may not reflect the estimates of an actual environmental consulting
firm.

Riordan Manufacturing: A Business Proposal

10

deposit of 15%, which is our standard retainer. This proposal will expire on July 15, 2010. If you
would like to discuss the terms of this agreement or the services outlined, please let me know.
The entire Lunsford Environmental staff and I look forward to working with you.
Sincerely,

Caitlyn Gartz
Caitlyn Gartz
Vice President, Marketing
Lunsford Environmental

Accepted for Riordan Manufacturing by

Name:
___________________________________________
Signature: ___________________________________________ Date: _______