“Riordan Manufacturing is a global plastics manufacturer employing 550 people with projected annual earnings of $46 million” (University of Phoenix, 2005). Riordan Manufacturing currently has an inventory process in place for managing the flow of raw materials throughout the manufacturing process. This process includes managing inventory of finished product, sales, and shipment to the customers. The focus is to introduce a new inventory and supply chain management system to manage the flow of supplies from raw materials to processing sales and shipping inventory.
The goal of the new system is to “gain an in-depth, real-time view into key supplier, inventory and procurement indicators” (NetSuite, 1998). Using this inventory and supply chain management software will help Riordan Manufacturing save money by reducing amount of raw materials on hand, amount of manpower at the factory, and allow sales to be processed and taken out of inventory instantly.
The stakeholders involved in Riordan Manufacturing’s inventory and supply chain process, along with the members who will be involved in the decision to implement the new systems.
The stakeholders at Riordan Manufacturing provide input in the basic requirements for the inventory and supply chain management. The main goal of the software is to “be able to better manage inventory levels and costs—and better meet fulfillment expectations, improving customer service” (NetSuite, 1998). The requirements are coming from the perspectives of the vendors, receiving area supervisor and team, inventory clerks, manufacturing staff, sales staff, shipping staff, and Riordan Manufacturing’s customers. “In planning and operation of production systems manufacturers have two main strategies for responding to uncertainty: they build inventory to hedge against periods in which the production capacity is not sufficient to satisfy demand, or they temporarily increase the production capacity. Example: hiring temporary workers, adding overtime and extra shifts, or by outsourcing part of the production)”(Hu, Huang, & Vakili, p. 191, 2004).
The sales process flow chart starts with retrieving electronic orders from data base, once the customer has completely filled out the order form online. It is then downloaded to company’s data base for processing, where the information and order will then be validated. The validation processes the information simply by verifying, the billing and shipping information for validity once verified the order is match against the availability of raw materials. Depending on the availability of raw materials the raw materials are remove electronically from the inventory system and the order is filled, sent to shipping for expedite the manufacturing process to proceed the process of the order. In the event there are not enough inventories on hand, the next step will be to notify customer of delay of delivery of its order. The purchasing and receiving supervisors are notified of what is needed to complete the order. Finally, when all raw materials become available order is processed and ready for shipping.
As sales are processed, inventory is removed to fill the order, if inventory is not on hand to fill the order manufacturing is expedited. This process requires raw materials on hand, once raw materials falls to the minimal level an automated order is processed to replenish supply levels. Raw materials are then pulled into manufacturing to begin the manufacturing process. Once manufacturing process is complete, inventory is updated, product is shipped, and an automated order is processed to maintain minimal levels of raw materials on hand.
Implementing NetSuite's inventory and supply chain management software at Riordan Manufacturing will save the company money through reductions in storage, raw materials inventory, and labor. This process will cut down on the amount of inventory on hand and reduce the overall cost for managing raw materials inventory on an annual basis. By reducing the cost of overhead, Riordan Manufacturing will regain their competitive edge while increasing revenue. Not making the necessary changes will continue to drive the costs of manufacturing and managing inventory up at Riordan Manufacturing leading to wasteful spending.
Systems development project riordan manufacturing final draft
SYSTEMS DEVELOPMENT PROJECT RIORDAN MANUFACTURING CIS/319 – Computers and Information Processing August 4, 2012 Valora Hawkins Dr. Roger Aylstock
Table of Contents Riordan Manufacturing Background Objectives Issue and Opportunity Identification Proposed System Improvements Stakeholders List Software Requirements Sales Process Flow Charts Manufacturing Process Flow Charts Offer Solution
Systems Development Project Riordan Manufacturing’s Background
OBJECTIVES Issue and Opportunity Identification Proposed System Improvements Present & illustrate Inventory and Supply Chain Management Requirements
Present the Issue and Opportunity Identification Operations and inventory process for Riordan Manufacturing involves many steps as raw materials flow through the manufacturing process The process involves a paper trail from start to finish that leaves room for error and costs Riordan Manufacturing annually by not implementing an automated inventory management system in place Current process is divided into three functional areas, raw materials receiving, manufacturing with inventory, and product shipping.
Present the Issue and Opportunity Identification Continues…. Company is currently faced with increasing labor costs and a decrease in productivity. The current process costs Riordan Manufacturing a large amount of money on an annual basis from raw materials on hand, warehousing for raw materials, salaries that could be automated and finished product inventory on hand
Proposed System Improvements We are introducing an inventory and supply chain management software by NetSuite; this software will help Riordan Manufacturing use customer demand to drive manufacturing and raw materials on hand. Goal of Software Implementation
Who is involved in the process? Stakeholder List Riordan Manufacturing’s Vendors Manufacturing Staff Receiving Area Team Sales Staff Receiving Area Supervisor Shipping Department Inventory Clerk Riordan Manufacturing’s Customers
Inventory and Supply ChainManagement Key Requirements Automated raw materials inventory process. Eliminate the paper trail as materials progress through the manufacturing process. Automate the inventory process as sales orders are submitted. Link raw materials inventory, manufacturing, product inventory, and sales orders to maximize efficiency. Automating the process will save Riordan Manufacturing money and reduce errors from the manual tracking process.
Requirements for Software Implementation1.1 Customer goes on website and places order for finished products1.1.1 System verifies inventory on hand1.1.2 If quantity is not on hand, customer is contacted1.1.3 If customer wants to proceed, rush manufacturing1.2 If inventory on hand, system deducts the order from inventory1.2.1 Order is billed and shipped1.3.1 Raw materials order is sent to vendors to replace raw materialsinventory1.3.2 Manufacturing team pulls raw materials on hand and starts amanufacturing process to replace inventory1.3.3 Inventory is updated1.3.4 Raw materials order is sent to vendors bring raw materialsinventory above minimal levels
ReferencesHu, J. Q., Vakili, P., & Huang, L. (2004). Capacity and Production Management in a Single Product Manufacturing System. Annals Of Operations Research, 125(1- 4), 191-204. doi:10.1023/B:ANOR.0000011191.49933.04NetSuite. (1998). Retrieved from http://www.netsuite.com/portal/products/netsuite/supply-inventory/main.shtmlThe Computer Journal. (1985) 28 (2) : 97-104.Defining Systems Requirements to meet Business Needs: a Case Study ExampleUniversity of Phoenix. (2005). Virtual Organizations. Riordan Manufacturing. Retrieved July 12, 2012, from University of Phoenix, Week Two, CIS/319 –Computers and Information Processing Course Web site.