Riordan Manufacturing's China Systems

Riordan Manufacturing’s China Systems

Riordan Manufacturing began business as Riordan Plastics in San Jose, CA in 1991 as a research

and development company and licensing of its polymer processing patents. Over the years, the

company has acquired a fan manufacturing plant in Pontiac, MI, a plastic beverage container

manufacturing plant in Albany, GA and most recently expanded to a new manufacturing plant in

Hangzhou, China. To expand on its product offerings, the company moved its fan manufacturing

operation to the new China plant and the Pontiac, MI location now handles custom plastic parts. Some

of the company’s major customers include the Department of Defense, automotive parts and aircraft

manufacturers, appliance manufacturers, and beverage bottlers. The expansion of operations has

increased Riordan Manufacturing’s customer base, but has also led to some issues with disparity and

compatibility among the business systems between the independent operating locations, some of which

need attention to improve business operations.

Currently, there is not a comprehensive view of the existing and needed business

systems at Riordan Manufacturing. As such, the CEO has requested (Service Request #SRвЂÑ'rmвЂÑ'

012), this document, which is a summary of the business systems at Riordan Manufacturing’s

China plant location. The summary will be the basis for a systems plan for more effective

management and includes detail for the following divisions within Riordan Manufacturing:

Finance and Accounting, Sales and Marketing, Human Resources, Legal, and Operations.

Riordan Manufacturing’s finance and accounting services division has systems in place,

but key systems are missing. Finance and accounting systems are vital to large businesses.

Businesses established in America as well as other countries have to make their finance and

accounting systems stronger and more accurate than a standard large company that is located

in only one country. Currently Riordan’s China manufacturing plant does not have any Finance

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and Accounting System in place. The China manufacturing plant is in desperate need of finance

and accounting system in order to keep the plant running smoothly. Without a modern finance

and accounting system in place, Riordan’s China manufacturing plant will have to operate hard

copy finance and accounting system in a foreign country. The paper finance and accounting

system in a foreign country is prone to errors, susceptible to lost papers, inefficient, and can be

very costly. The best way for Riordan’s China manufacturing plant to run finance and

accounting system is to outsource.

With a ledger, finance and accounting system users can make multiple types of errors.

The easiest error to create with a ledger system is the inability to read other peoples had

writing. Major accounting and finance errors occur when adding numbers incorrectly.

Mathematical accounting errors can cost a company millions of dollars. China is not lenient

when it comes to accounting regulations.

Paper the most vulnerable finance and accounting system. Lost paper work is

unacceptable in China when it comes to the government. The vulnerabilities of paper finance

and accounting systems include theft, fire or loss of files. Fire is a very high possibility in China

because of the lack of building codes in China. Theft is much easier to do with paper than a

highly secure computer system. It would take hours for a professional cracker to get into a

highly secure computer system where it can take a few minutes to break into a file cabinet.

The efficiency of paper finance and accounting system is very low. Look for file in file

cabinets could take a few minutes to hours. Filing paper is not very efficient because files can

miss filed, on another employee’s desk, or lost. The time spent looking for files are an

enormous waste of time. The wasted time prevents employees from accomplishing other tasks

Comment [E1]: SPELL > handwriting

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that need to be taken care of which in turn wastes money. Time is a very important to

businesses because of how much money misuse of time costs. Misuse of money can drop a

corporation’s profits and if the money is grossly misused, a corporation can go into bankruptcy.

China’s current tax rate for foreign corporations is 25 percent, before the tax rate for foreign

corporations was 15 to 24 percent (The WorldWideвЂÑ'Tax.com, 2008). China’s corporation tax

laws are changing more rapidly now that China is seeing foreign companies show up. China is

“extremely stringent” (1) with their accounting regulations. China’s tax revenue has increased

substantially. Outsourcing finance and accounting will save Riordan