Riordan Manufacturing Business Systems and Subsystems

Riordan Manufacturing Business Systems and Subsystems

Riordan Manufacturing Inc. (Riordan) is a vastly growing plastics company. This company prides itself on their chemically enhanced polymer plastics. Riordan has two warehouses stateside, one warehouse in china and their corporate headquarters is located in San Jose, CA. Riordan Manufacturing was founded in 1991 by Dr. Riordan, a chemistry professor working with polymers and high tensile strength plastic substrates. With great success Dr. Riordan was able to expand his company over the years, obtain a manufacturing plant, and we are now seeking to streamline information technology processes to enhance productivity across all locations.

The necessity for Riordan to have an efficient manufacturing and inventory system is at a high priority. By streamlining system processes, Riordan can take back control of having a smooth operating business. By getting every location on the same track, Riordan Manufacturing will be saving time, creating efficiency, increasing productivity, and ensuring that information is accountable and therefore manageable.

Current Systems Evaluation

Riordan is operating out of four different locations but each entity retains their own finance and accounting systems. The information received in these areas then is consolidated in the corporate location out of San Jose, CA. There are 9 components of each system which are listed below.

▪ General Ledger

▪ Accounts Payable

▪ Accounts Receivable

▪ Order Entry

▪ Procurement

▪ Sales and Purchasing History

▪ Invoicing and Shipping

▪ Payroll

▪ Financial Reporting

The corporate, San Jose, office has the advantage as they utilize an additional three components for streamlining. These components are EDI (Electronic Data Interchange), Bar Code Reading, and EDSS (Executive Decision Support System). In the rapid growth of the company compatibility issues were not properly addressed and now Riordan is facing the challenge of improving its business systems. As it currently stands, the corporate office is licensed for a fully integrated Windows based ERP system. This license fails to include source code. The site located in Michigan was vendor contracted with an application that is outdated. The vendor is no longer in business and is running on a pair of DEC Alpha's, using VMS operating system, and VAX4000 stations programmed in C. The Georgia plant uses a different vendor for application software and is running on a UNIX operating system. They operate PC's programmed in RPG400.

From the previous listed information we can identify the immediate need to achieve compatibility across all locations. Some information is coming in on computer systems, some is hand-written, and most needs to be converted once it reaches the corporate location. We can see that the corporate location retains the strongest processes, as they are leader in finance and accounting for the company. Work will begin by analyzing why these processes are right for the main office and discuss the possibilities of implementing the systems and subsystems that may be required to bringing all locations to mock functionality of corporate.

Human Resources and Legal Overview

In 1992, Riordan Manufacturing's Human Resource Information System (HRIS) was implemented. An HRIS system is a software application, or program which is similar to an Enterprise Resource Planning system (ERP) but its primary function is focused on helping to manage a company's human resources. The purpose of the HRIS is to keep track of the following: employee personal information, organizational information, pay rate, date of hire, seniority date, vacation hours, personal exemptions and other various statistics. Changes to this information are submitted in writing by the employees' manager, on a special form, and are then entered to the database by the payroll clerk. Individual managers keep employee files and those managers are responsible for tracking and accommodating both FMLA and ADA.

Legal

Although Riordan Manufacturing has a Chief Legal Counsel that oversees all legal matters, Riordan has an outside law firm that is called upon from time to time to give aide in the event that the in-house counsel feels overwhelmed. The fact that Riordan is paying a monthly retainer that is not carried forward at the end of the month for this counsel, suggests that the need exists for extra in-house expertise. With the hiring of each position outlined below, a paralegal and an administration position should be created as well to eliminate the need for outside counsel.

Existing Systems

In order to maintain all of the companies success, Riordan Manufacturing has put in place multiple business systems that will allow their company to periodically improve their efficiency and effectiveness within their operations. Innovative business systems such as the ones currently in place in the human resources and legal departments are the primary reason why the business has remained successful for so many years. These departments are an important part of Riordan's operations and contribute to the company's overall ability to its production methods. Our analysis of these departmental systems and sub-systems will show those areas that are working in a positive matter and the areas that are in need of some process improvement and will discuss the risks and positives associated with them.

Riordan's current management team is made up of several key support system areas with the primary responsibility of gathering data for company day to day functions. These key support systems are as follows: accounting, receiving clerk, area supervisor, inventory clerk and lastly sales department. Receiving area supervisors make individual comparisons using each one of the daily reports after they have been passed to the related department each week. The reports are then organized by date for any raw materials delivered by the receiving clerk in charge of receiving. Then they become an inventory tool that is used to compare all incoming orders against the scheduled deliveries and their inventories arriving daily.

Processes

Once materials are delivered and checked in, the area Supervisor steps in and hands the inventory log over to the receiving clerk with the attached delivery document