Riordan Manufacturing Case Study

SR-rm-012

Michael J. Beard Jr.

Anderson Thomas

Ulises Bocchio

Jason Besley

Justin Collum

BSA/310

02/27/2012

Dave Sciuto

Abstract

Riordan Manufacturing is a plastics manufacturer with 550 employees, its headquarters is located in San Jose, California and has other facilities located in Pontiac, Michigan which produces custom plastic parts, Albany, Georgia, which produces beverage containers, and Hang Zhou, China, which produces fan parts. Riordan Manufacturing's customers consist of aircraft, automotive, appliance, beverage manufacturers and the Department of Defense. Riordan Manufacturing is among the Fortune 1000 enterprises with revenues exceeding $1 billion dollars (Apollo Group, Inc, 2011).

Riordan Manufacturing mission is to remain an industry leader for plastic manufacturing and identify industry trends by continuing its long term relationships with customers and by making sure its products are reasonable and innovative. The company will also maintain a responsive attitude; maintain quality controls and future profitability. A solution provider, Riordan Manufacturing also maintains a safe working environment for its employees as well as making sure they are informed and supported (Apollo Group, Inc, 2011).

After reviewing Riordan Manufacturing internet site, description, mission statement, finance and accounting information, the team has developed an analysis and set of recommendations for Riordan Manufacturing.

SR-rm-012

Each location of Riordan Manufacturing is independently managed. Pontiac, Michigan, Albany, Georgia, and Hang Zhou, China, use individual business systems to process information like general ledgers, accounts payable and receivable, order entry, procurement, sales and purchasing history, invoicing, shipping, payroll, and financial reporting. In addition, the San Jose location also uses EDI, bar code reading and EDSS (Executive Decision Support System). These individual business systems are not compatible to relay data, so when information is compiled and sent to headquarters in San Jose, California the data sometimes has to be entered manually. This process has errors due to human input when consolidating general ledger, income statements and balance sheets, is time consuming and costly, and causes delays (Apollo Group, Inc, 2011).

Riordan Manufacturing San Jose location uses integrated Windows based ERP software which includes manufacturing, distribution and financial management that was designed for Riordan Manufacturing. However, the ERP does not include source code application.

The Pontiac, Michigan location no longer has vendor support, and the application uses VMS operating systems, VAX4000 work stations that are programmed to C running on DEC Alphas. Albany, Georgia runs on AS400s, UNIX operating system, windows, and programmed in RPG400.

Timely results are critical to any company, and Riordan Manufacturing needs improvements, due to the lack of consistency with existing business systems and sub-systems. Locations need to be integrated which will save time, money, create faster access to information and allow manageability with finances and accounting.

Finance and accounting

As stated, Riordan Manufacturing needs to upgrade and consolidate its Financial and Accounting systems and subsystems. It is proposed to merge or replace the existing systems into a cohesive whole, using the ERP system and combining EDI bar code application. Replacement and merging of hardware and software will allow Riordan Manufacturing to consolidate and share information among all locations.

Each subsystem should be able to communicate with the overall system, and with other subsystems as needed. For example, Order Entry should report to Sales and Purchasing History, and Accounts Payable should report to General Ledger. By allowing subsystems to automatically report to each other as needed, workers will be able to quickly and easily identify and retrieve needed information. Manual re-entry of data will no longer be needed, saving the company time and money.

ERP

For effective management, Riordan Manufacturing needs an Enterprise Resource Planning (ERP) system, which is an integration of all organizational resources, manufacturing, supply chain, financial, project management, human resources, customer resources, marketing, and accounting software modules including point of sale, inventory, employee hours worked, general ledger, invoicing, collections, expense, payroll, assets, payables and receivables. Tools like the EDI bar code translators and maps will interface with the ERP system. The translator reads the file, assigns, validates, and maps location.

Enterprise Resource Planning software will receive information from the General Ledger and from the financial reporting subsystem. It will generate reports used by company executives in making policy decisions for the company. It will not report to any other financial subsystem. The Enterprise Resource Planning will consolidate statements into one currency, handling all currency conversions and will be used to meet the needs and address regulatory/contractual requirements. The ERP software integrated and designed for best practices, delivering and implementing unique process requirements (Find Accounting Software, 2011).

General ledger

The General Ledger subsystem will track the overall finances of the company. By receiving reports from the rest of the financial system, General Ledger will be able to monitor the financial status of the company. Information regarding income and expenses will be automatically supplied to the general ledger by other subsystems, and the general ledger will supply its findings to the Enterprise Resource Planning System and the Financial Reporting subsystem. The general ledger will be set up to reconcile itself daily.

Accounts