Riordan Manufacturing is a Plastic manufacturing Industry which is recognized globally. The company has a total strength of about 550 employees and is estimated to generate annual revenue of about $46 million. The Riordan manufacturing belongs to the Riordan industry which is one among the fortune 1000 companies generating more than $1 Billion annually. The Riordan manufacturing has been setup in many countries, these are connected together by wide area network, and so inter operation among they became possible.
The Riordan has its Research and Development Office at San Jose, CA. The Company had been doing well and has been working for i??automotive parts manufacturers, aircraft manufacturers, the Department of Defense, beverage makers and bottlers, and appliance manufacturers.i?? (AcaDemon, 2007)
The initial step in this project is the order being placed by the customer.
The order entry clerk makes an entry of the order.
Then the terms and conditions are given to the customer by the entry clerk.
The terms and conditions are accepted by the customer.
Then the order is taken for processing.
The order notice is given to the production manager.
The production planning is done by the Production manager.
This involves the following steps:
i?? A production order is created.
i?? The amount on the production order, release order for production, and print order is changed
i?? The milestone confirmation for the production order is created with black flush.
i?? The final confirmation for production order is created.
i?? The goods receipt for the order is posted.
i?? The production order is settled.
The Production manager finds whether the order is out of stock i.e. not much amount of goods required is available. The amount of goods required is checked with the Inventory (Inventory is the goods that are made available in stock for any urgent use by the business.)
If there is no much stock available to supplement or fulfill the order, then replenishing is done.
This involves the following steps
i?? The Production planner
i?? The Sales Manager.
If the lead time exception given by both the Production planner and Sales Manager becomes acceptable and approved, then the product is ready for manufacturing.
Now the order gets fulfilled.
The product is shipped.
Then Invoicing is done. (The accounting bill is made by the company to the customer. The invoice details about date, customer, vendor, quantities, prices, freight, and credit terms of a transaction.)
The Requirement Analysis is the first and the foremost step in any project. Research says that improper or inadequate requirements at the beginning of a project, makes the project more vulnerable to changes. In some cases they doni??t even deliver the basic products for which they were designed for. There are illustrations of concerns that have spent large amount of money and energy, but the end application eventually fails to perform the required tasks.
Very recently, the companies are devoting more time and resources for performing proper requirement analysis that are needed for the success of the project that aligns the clienti??s goal and to meet projecti??s requirement specification. Requirements Analysis is the thoughtful process of getting the clienti??s needs and expectations before starting with the design stage because any change in the requirement change may lead to a change in designing phase also. This is the most important step in Software Development Life Cycle model. Requirements like how a system should behave or a description of system properties or attributes should be analyzed. It should say what a project or an application has to do or expected to do.
The Riordan manufacturing had been very constructive since its inception into the global market. But as years passed by the business processes at Riordan manufacturing became difficult to meet the requirements, so plans were made to improve the Business process at the company.
The process that need improvement were the following
The Inventory is the list of raw materials or goods needed for the production the particular product. The inventory is very essential for a company to operate because of the following facts,
i?? Time : The time is an important criteria where the time taken for the supplier to supply may be delayed at times some stages of production
i?? Uncertainty: The uncertainty is where the supplier cannot meet the companiesi?? requirements in supplying raw materials, so a buffer of the inventory is needed to maintain the production.
i?? Economies of scale: Ideal condition of, one unit at a time at a place where user needs it, when he needs it i??is a condition that costs more between logistics.i?? (Hot essays, June 2008). So buying and storing in bulk becomes important to maintain production.
A buffer stock of the raw materials is required to maintain the production of the products that are being manufactured. These can be reduced by utilizing a tool called single minute exchange of Die. The SMED is a production method where it reduces the overall waste that is produced during the manufacturing process. This provides a rapid changeover from one product to the other thereby reducing the costs involved.
The inventory Control is the process of decreasing the overhead of a company but this should be in such a way that it does not affect the profit margin. The Inventory Control has the following problem,
i?? There are many factors to be considered in Inventory like, the Production cost, Buffer cost, shipping costs etc and estimating the cost of each becomes a big issue.
i?? The next one would be the availability of the needed raw materials or delay in supplying the raw materials
i?? Finally if the cost that has been estimated to be spent on Inventory is very low when to compared to sales then at times even the cost of production could not be met.
So the people at the top management level have decided to produce software that essentially manages the whole inventory management. The Inventory can be controlled by management software which is called the ERP software. The ERP is the Enterprise Resource planning, previously it was Manufacturing Resource Planning later on the Enterprise resource planning came into developed.
Enterprise Resource Planning (ERP)
The Enterprise Resource planning revolves round the act of spending the resources present equally thereby minimizing the overall Production Cost. So essential Software, like Manufacturing ERP is required for effective sharing of the resources. The Cost of Establishing an ERP system could be quite high but this system in place could increase the productivity and thereby reduce the overall cost being used for the Inventory. Thus a proper management of the Inventory is needed to reduce the overall cost.
i??ERP, with the help of ERP software, expands his responsibilities for all types of business organization and improve business processes, including strategic planning, management control and operational control.i?? (Riordan Manufacturing, 24th March 2008)
The ERP in a single Database handles many Departments like manufacturing, shipping, inventory, logistics, Allocation of Projects, Data Warehousing, Human Resource, Customer Relationship management etc.
Outsourcing of the Products
The Outsourcing of the Products had become an essential issue in terms of improving the strategy of the company. By outsourcing the product manufacture to a third party company the Production cost and the Inventory cost will be reduced to some extent. Many Industries have started outsourcing their projects for egg. An automobile Industry will outsource some of the Spare parts that are being used in the manufacture of the Automobile. By this way they leverage their work and thereby save time for the production of the main Product.
The decision of outsourcing the product is taken at the top level management as what product to outsourced or sub-contracted. After these decisions the management needs to sign up a contract with the supplier as well as the sub-contractor. Usually, there will be a competition between the sub-contractors in getting the project from the industry that is offering the contract; this is also called as Contract Manufacturing. Based on the Bid the sub-contractors are selected.
The Products are manufactured manually by pouring the melted plastic onto a mould and cooled to get the plastic of the same shape. This seems to be traditional and long process, So the manufacturing companies needs a change to enable easy and efficient way of producing the plastic product. The advancement in technology has given way to conquer the Manufacturing process in a very systematic and easy way.
The Introduction of new softwarei??s in the field of designing has made a great changeover in the manufacturing industry. The computer Aided manufacturing enables production of a plastic product within seconds.
Computer Aided Manufacturing
The Manufacturing of the Plastic had been done manually until the computer aided manufacturing came into existence. The Computer Aided Manufacturing has been used extensively by the Manufacturing industry. New softwarei??s have been developed to enable the production of plastic products. The computer Aided manufacturing is done with the help computer aided design software. The cost of implementing the system is very high, but once bought this could in turn bring down the production cost. Some of the softwarei??s that could be used are Unigraphics, DelCam powershape, Mold Advisor 7.2 etc .With the help of these softwarei??s a complicated design and moulds could be produced. The Mold Advisor 7.2 softwarei??s allow the operator to simulate the following
i?? They could show exactly how the melted plastic behaves when poured into the mould.
i?? The temperature and pressure can be varied in different places of a particular part that is being produced .The temperatures are distinguished with the help of colors. For egg, if the temperature is too hot then it is denoted on red color.
The Lean Manufacturing is a Production method in which the waste produced is reduced, by which the amount of raw materials used is fully utilized in the manufacturing process. i??The Lean Manufacturing philosophy names seven major wastes that should be dealt with - Over-production, Transportation, Waiting time, Processing, Motion, Inventory, and Scrap.i?? (Riordan Manufacturing, 15th February 2008). The manufacturing industry must be able to stabilize between the demand and supply. If any one of them is in excess then the manufacturing industry is sure to incur a loss. So there need to be a proper control over the inventory. The more, the quality of the product, greater, the profit for the industry.
The Cost of Production can be reduced by proper management of the inventory Stocks. So ERP would the best option in utilizing the resources that is present in the Buffer stock. By leveraging the work to sub-contractors the costs of production and the time can be considerably reduced. The use of Cutting-Edge technologies in the production could improve the overall profit of the manufacturing and reduce the time of production of the designed product.
Studies about the increasing budget of Riordan plastics say that strategies are taken for equalizing increased IT spending for Riordan Manufacturing. According to recent strategies, i??In redefining the IT cost center consolidated operating budget for Riordan Manufacturing, a 4% increase in spending on selected hardware software, services including access charges yields a net gain in spending of $5,764.16.i?? (Riordan Manufacturing, 15th February 2008). By re-negotiation of software licensing and maintenance the unbalanced budget can be straightened out. Re- examining the employee related expenses may be a good start.
A paper relates that i??Riordan needs to investigate the cost reductions possible in licensing using software-as-a-Service (SaaS) as an alternative integration and application platform.i?? (Riordan Manufacturing, 15th February 2008).
i??When taking into account the 4% increase in IT spending and the 2% reduction in the total budget, the annual IT budget is restated from $1,901,300 to $1,863,274. The 4% increase in IT spending has been applied to the baseline figures for hardware, software licenses, contract services, and leased lines.i?? (Oppapers, June 2008). These factors are much needed for managing Electronic Data Interchange (EDI) connections with other manufacturers and buyers.
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Riordan (February 15, 2008) -i??Optimizing Your Manufacturing Process Using Lean Manufacturing (Riordan Manufacturing) i??-Retrieved June 11, 2008 from
i??Riordan Budget Reductioni?? (2007) i?? Retrieved June 11, 2008 from
i??Riordan Manufacturingi??- Retrieved June 11, 2008 from
i??Riordan Manufacturingi??- Retrieved June 11, 2008 from
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