Sr-Rm-001 Process Evaluation Executive Summary

RUNNING HEAD: PROCESS EVLAUATION EXECUTIVE SUMMARY

SR-rm-001 Process Evaluation Executive Summary

Team D

Abstract

A manufacturing company's success depends on its manufacturing system design. The concept of the manufacturing system design has been the fundamental driving force in the advancement of manufacturing, perhaps even civilization itself. For without this concept of manufacturing system design, manufacturing would still be trapped in the intellectual darkness of the middle ages. The invention of the forerunner of the modern factory 200 years ago was the first system design. Periodically, a new design concept sweeps through the industrial world, igniting the fires of better and more productive manufacturing systems. These modern systems are directly responsible for the improved standards of living in the world today.

The essential task of the manufacturing, planning and control system is to manage efficiently the flow of material, the use of people and equipment, and to respond to customer requirements by utilizing the capacity of the suppliers, that of internal facilities, and (in some cases) that of customers to meet customer demand. Important ancillary activities involve the acquisition of information from customers on product needs and providing customers with information on delivery dates and product status. The purpose of this paper is to provide a brief synopsis of the challenges Riordan is currently experiencing with information technology and what steps should be taken for improvement. IT developments will be examined, also key improvements that could be made to increase company productivity, increased collaboration, focusing on fast and easy access to customer and supplier information. Research has shown that by further developing our IT infrastructure, Riordan can stay competitive with the most up to date technology available in the field.

SR-rm-001 Process Evaluation 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 process. 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.

Operational Changes

Potential Changes to Operations for Riordan Manufacturing include looking at changing to a Vendor Managed Inventory (VMI) control system. The objectives of a VMI system are to increase sales, improve CSL (Customer Satisfaction Level), increase gross margins, reduce overall inventory in the SC (Supply Chain), and stabilize vendor production. The disadvantages are required additional IT components and integration. Integration of a Forecast Driven Vendor Managed Inventory (FDVMI) would integrate the forecast models into the mix as well and could add to even better margins and operational use. In addition it was determined that there was an upgrade needed for the current CAD system. The CAD upgrades combined to the focus on cleaning up the Effectiveness and Efficiency of operations, and increased focus on the Transformation of the development process will have an effect on the long-term financial impact of the company. Making the changes will allow Riordan Manufacturing to develop and produce high technology superior products. (Riordan, 2007)

Another suggested operational change is for all three plants in the United States to operate on the same system. For Riordan to achieve and maintain profitability, each plant and office are recommended to use the same fully integrated Windows based Enterprise Resource Planning (ERP) manufacturing, distribution and financial management software. This is an application that is designed for plastics processors, and assembly manufacturers. Converting to this enterprise resource software throughout the company will allow the process to be monitored without having to have three different systems to do so. Maintaining the system will become easier as the individual who is responsible for it will not need to have the knowledge to maintain the other two systems. It will also allow the system to stay current and reliable with the proper updates.

At this time the corporate office in San Jose has a license for a fully integrated (ERP) manufacturing, distribution, and financial management software application specifically designed for plastics processors and assembly manufacturers (Riordan, 2007). Michigan has purchased software that was developed from a vendor who is no longer in business and the application runs on a pair of DEC Alpha's using the VMS operating system (Riordan, 2007). The Georgia plant uses software that was developed by a different company than the one in Michigan.

Operational Rules

At the basic level of changing the minds of business leaders, he or she must recognize that the real goal of a company is to be efficient and make money. Several techniques used to outline the objective of making money and allow the development of operational rules used to run a business are operational expense, inventory and throughput. (Goldratt and Cox, 1992)

* Operational expense- is all the money the system spends in order to turn inventory into

throughput.

* Inventory- is all the money that the system has invested in purchasing things which it

intends to sell.

* Throughput- is the rate at which the system generates money through sales.

Raw Materials Receiving

As raw materials are delivered to the