Ridorian Manufacturing Sr-Rm-001

Service Request SR-rm-001 Processes Evaluation

It has long been said that the Information Revolution will change the way organizations do business. In a world where time and information is money, information technology is critical to an organization's success and longevity. In order for Riordan Manufacturing to establish the organization as a leader and provide added value to customers, Riordan needs to evaluate their current business processes and learn how technology can scale operations in a cost effective manner at the same time focusing on using technology in areas that would provide immediate results.

Executive Summary

Currently, Riordan Manufacturing has a common set of procedures in place for the management of raw materials, tracking products during manufacturing, and accounting for the finished goods. In an effort to streamline and improve processes, Mr. Hugh McCauley, COO has requested the development of specific system changes that will improve the inventory and manufacturing processes.

Team C was established as per Mr. McCauley's request to evaluate Riordan's current procedures and make recommendations for improvement. In the team's final report numerous problems were identified within the manufacturing flow including:

1. Uniform written procedures and policies do not exist pertaining to inventory.

2. Receiving Area Supervisor and Manufacturing team rely on printed reports from the previous shift.

3. The current system does not provide a tracking system that can be utilized by the sales team and management for inventory control.

4. The current system does not enable employees to view real time inventory. The inability to locate or identify materials on hand has caused the emergency purchasing of otherwise unneeded items.

Team C recommendations for improvement include a system that will automate many of the tasks of the current inventory system enabling Riordan to increase the accuracy of the data gathered in the warehouse and reduce the need for physical inventory check. Investing in inventory software will enable Riordan to streamline the process of raw materials and sub assemblies processing at all plants. Additionally, implementing RFID tracking system where the manufacturing team will tag items and as the shipping orders leave the factory each will be scanned. This will enable the sales and management team to track inventory en route to its destination and provide the management team real time inventory.

A successful implementation of inventory and manufacturing upgrades including RFID technology depends on a clearly understood and well supported plan by everyone within the company. One of the key reasons for implementing the upgrades is to enhance business practices and truly revolutionize how business and operations are carried out. Throughout the paper, Team C members will discuss the proposal to implement a new system. In order to supply Mr. McCauley with an effective implementation plan, Team C members followed the five step System Development Life Cycle (System Investigation, System Analysis, System Design, System Implementation and System Review). Following these steps enabled Team C members and key players to carefully understand the current process and apply a successful implementation plan.

Step 1 - System Investigation

In order to fully access and understand the current workflows within Riordan Manufacturing, Team C members established a computer committee whose members include Riordan employees from all levels within the organizations and outside consultants. The committee viewed current front-end and back-end practices. The report indicated that Riordan's current processes have the strengths of all facilities following the same procedures and Riordan has a strong established network. Both these factors will allow for easier development and implementation of new processes. In the final report, Team C members identified the following problems and the recommended improvements:

Raw Materials Receiving

The current receiving practices are inefficient. The Receiving Area Supervisor does not have access to the existing inventory management system and instead relies on paper forms to confirm the received shipments of raw materials. An inventory clerk updates the inventory system the following day. Automating receiving will reduce the amount of labor needed to manually check-in incoming items. It will also save time and energy spent resolving proof of delivery issues and allow for real-time inventory counts.

Manufacturing Inventory

The current procedures for removing raw materials from factory inventory and inputting final product counts are inefficient and cumbersome. In addition, manual inventory can be an administrative burden and may also delay confirming customer's finished product. Upgrading and realigning workplace procedures will decrease the amount of time inputting inventory into the system and can be done by the use of computers replacing the paper forms and allowing access to a system wide inventory program which will establish real-time inventory counts.

Final Shipping

The current system of taking orders and shipping procedure is inefficient in several ways. First, orders are sent into Riordan via phone, fax, or Sales Representative then manually entered into the sales orders program which is separate from the inventory systems causing an additional step for inventory to be adjusted. This leads to concerns of potential backorders with more orders being placed than products available. Second, tracking of the shipment is done by writing down the number of the truck then entering it into the billing system. This necessitates the contact of a third party in order to locate a shipment.

Suggestions to improve this are as followed:

1. Develop a standard procedure for orders. The sales representative can receive customer orders from the customer via phone, e-mail, or fax. The sales representative will input order into the Riordan computer system. Implement a computer program that will allow for orders to be generated and that will update inventory as the orders are filled.

2. Implement RFID system for in house tracking of shipments. Implementing RFID can confirm that outgoing shipments are accurate, complete, and loaded on the correct truck. Because RFID tracks the movement of goods within a facility and beyond, it also can help combat theft and shrinkage. In addition, documenting product movement makes it easier to resolve