4. OBJECTIVES
Issue and Opportunity Identification
Proposed System Improvements
Present & illustrate Inventory and Supply Chain
Management Requirements
5. 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.
6. 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
7. 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
8. 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
9. Inventory and Supply Chain
Management 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.
10. Requirements for Software
Implementation
1.1 Customer goes on website and places order for finished products
1.1.1 System verifies inventory on hand
1.1.2 If quantity is not on hand, customer is contacted
1.1.3 If customer wants to proceed, rush manufacturing
1.2 If inventory on hand, system deducts the order from inventory
1.2.1 Order is billed and shipped
1.3.1 Raw materials order is sent to vendors to replace raw materials
inventory
1.3.2 Manufacturing team pulls raw materials on hand and starts a
manufacturing process to replace inventory
1.3.3 Inventory is updated
1.3.4 Raw materials order is sent to vendors bring raw materials
inventory above minimal levels
15. References
Hu, 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.0000011191.49933.04
NetSuite. (1998). Retrieved from
http://www.netsuite.com/portal/products/netsuite/supply-inventory/main.shtml
The Computer Journal. (1985) 28 (2) : 97-104.Defining Systems Requirements to meet
Business Needs: a Case Study Example
University 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.
Hinweis der Redaktion
“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.