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Riordan Manufacturing Business Systems Analysis and Recommendations

Essay by   •  June 2, 2011  •  Case Study  •  3,287 Words (14 Pages)  •  2,533 Views

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Riordan Manufacturing Business Systems Analysis and Recommendations

For a business to run successfully many business systems need to work together to achieve a business goal. Many companies tend to put business before technology needs, and this sometimes puts the company in an awkward situation. This situation could be in the means of outdated technology that would make every day tasks impractical. Over the years Riordan Manufacturing has developed systems for their various operations including operations, finance, and human resources, accounting, legal, marketing, and sales. Some of these systems are either outdated or do not work any more. As the company expands the need for upgraded businesses systems are becoming a necessity rather than a luxury. With the current business systems in place and the recent expansion the cost of these systems is too much.

General Operations

Riordan Manufacturing current process for production and supply chain is primarily handled manually and by paper. This includes receiving the raw materials and producing the final product, which will be delivered to the customer. Manual processes such as these can produce negative effects caused by human error. These negative effects could be in many forms, which include increased production, loss of inventory, and revenue loss.

The current process in place for employees who receive or remove material from stock is time-consuming, decreasing the efficiency of the production. This could also increase the amount of paperwork that is completed within each department. Currently the employee must use a hardcopy form when receiving and removing any material from inventory. This form is forwarded to each department, which is then processed manually. Implementing an online system that would update inventory automatically, for example when material is receiving and when products are shipped. This online system could save valuable processing time. Adding a barcode system with a scanner would reduce the amount of human error when entering data into the database.

Riordan Manufacturing customer service department currently places many orders by phone and fax. These systems may have work fine when business was small but as Riordan Manufacturing expands and the volume increases, the potential for more efficient and less time-consuming technology is needed. For example creating a Web-based ordering system where customer could log in and place his or her order. This would create a central location in which customers could place the order and the order would be processed to whichever plant does that manufacturing for that order. This would create less stress for the customer and less incorrect orders.

Each of the operations department within Riordan Industries serves three different functions within each location. This includes ordering and storing raw goods, submitting customer requests, and shipping the product. Riordan has locations at their various sites that handle and solve specific problems to make the operations of the company for efficient. The current evaluation of the each site will be noted along with the current issues and their requirements.

San Jose, California

This location is home of Riordan research and development department and corporate headquarters. The research and development team consists of five team members. The needs for this location are minimal and use a fractional T1 connection for accessing the Internet and other United States based sites and a remote satellite link when accessing the China location. The current issue that would inhibit this location from processing anything would be the shipping process, which is completed by humans and is a paper-based system. The San Jose site does not run a production process from this location; their main focus is Research and Development, which means their inventory requirements are light.

Pontiac, Michigan

Riordan's Pontiac plant is their custom plastic fabrication operation. The network at the Pontiac plant is small with only 45 client computers, which operate on a fractional T1 line used to access the Internet and to the corporate office. The Pontiac plant uses the same human and paper- based system that is used in San Jose for ordering, inventory, and shipping. This is an issue because of all the custom orders that his plant produces; a human error could cost the company money. One concern about the Pontiac plant is the amount of space this facility needs to operate. The space needed to operate is important because of the amount of raw materials that are stored on site. This is important to the Pontiac plant because of the requests made are custom ordered products. The facility uses small productions runs but requires the raw material to operate efficiently.

Albany, Georgia

In Albany, Riordan produces standard and custom plastic bottles. The Albany location has 20 client computers, which operate on a fractional T1 line used to access the Internet and to the corporate office. This location has the same human and paper- based ordering, inventory, and shipping process as the other locations, but inventory is limited because of the limited space. Several different types of stock share the same inventory location including finished stock, raw materials, and safety stock; however this is a concern Riordan still maintains a 96% shipping efficiency. Utilizing many different types of transportation that can be inconsistent, for example trucks, trains, and airfreight, does this.

Hang Zhou, China

The China location is Riordan manufacturing of fans, which are based on customer's supply and demand. This location has 40 client computers, which operate on a fractional T1 line used to access the Internet and a separate satellite line for connection with the California corporate office. Hang Zhou independently produces product forecasts based on the supply needed and orders the needed materials. The raw materials needed to produce the fans are electric motors, and polymers, which are purchased from local companies. The China location operates independently within their location but the location faces two main concerns. One main concern is the contracted raw materials company that only produces a 93% on time delivery. The second main concern is the human and paper bases ordering, inventory, and shipping processes.

Accounting and Finance

Riordan Manufacturing has a current accounting system in place that enables company-wide communication at each location. This system is a good system and is critical for the operation of the company. The company-wide system includes accounts receivable/payable,

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