Inventory process improvement strategies and implementation

Inventory Process Improvement

This work is focused on "Inventory Process Improvement" and will be comprised of Part One, or the Executive Statement to this work, Part Two which will consist of process flow charts, procedures, or policy statements which articulate the business requirements in terms of specific process or business development needs, Part Three which will include software and hardware recommendations for the information technology solution and Part Four which will summarize the project proposal.

This project is centered on "Riordan Manufacturing." Manufacturer of global plastics, Riordan, employs approximately 550 individuals whose salaries total an estimated $46 million on an annual basis. Listed by Fortune 1000 as having $1 billion plus yearly revenues Riordan Industries completely owns the company. The product line is inclusive of containers for beverages made from plastics in Albany, Georgia while Pontiac Michigan produces plastic parts that are custom made and the Hangzhou,

China plant manufactures fan parts made from plastic. Research and developments is located in San Jose, California. The customers of Riordan include manufacturers of aircraft, auto parts as well as the Department of Defense, makers and bottlers of beverages and manufacturers of appliances.

I. Executive Summary

Ideally speaking the information for each transaction within the Riordan should be entered by the individual or team within the department taking action with or making removal of or being the mover of the materials instead of all of this being performed by the inventory clerk. Although the inventory clerk is at the specific location of the actions with the material the information being keyed in by the department taking the action with materials would be much more efficient as well as giving a "real-time" accounting on the company's intranet.

The purpose of this project is to streamline operations as well as make cutbacks within Riordan Manufacturing Industries.

Stakeholders associated with the project are the employees of Riordan Industries in all locations in Georgia, San Jose, Michigan and in the country of China. This would also be inclusive of the owners of Riordan Industries, as well as the customers of Riordan.

II. Processes within the Company

Raw Materials Receiving:

Common procedures are followed to effectuate consistent control of quality and operations in all locations. When receiving raw materials, product tracking during the manufacturing phase and finished goods inventory accounting is performed a set procedure is required. Upon arrival of the shipment by truck from the supplier in the receiving area, which is weekly and is on a date organization system, the Supervisor will compare the shipping document on record to the incoming orders schedule. After the supervisor validates the materials in the receiving area the teams in the receiving area will move the raw materials to the area marked for such raw materials within the factory. At the days end the supervisor in the receiving area will give to the receiving clerk the log of all raw materials receiving that day as well as the shipping documents associated with the received raw materials for the day. The information related to the received raw material will be entered into the inventory system by the inventory clerk. The inventory clerk will enter all types of materials received as well as the vendor and the quantity of materials received from the vendor on that date.

Manufacturing with Inventory:

After the raw materials and sub-assemblies are removed from the inventory usage form indicating the materials and types that were removed from inventory as well as stating the quantity of the materials are filled out by the manufacturing staff. The information on the raw materials and sub-assemblies usages are entered into the inventory system by the inventory clerk. As the sub-assemblies are built as well as the final products being completed this information is entered into an inventory form and then given over for updates into the inventory system performed by the inventory clerk. The inventory clerk will enter all of this information that is in relation to the sub-assemblies and finished products into the inventory system.

Shipping -- Final Product:

As orders are completed by the sales department those orders are then entered in the shipping and billing system relating to the customers. The sales orders can be taken by phone or fax and there is a sales staff that can place the orders as well for the customers. Entered into the customer and billing system the sales orders are placed on the shipping document that is generated each day which is the basis for the shipping departments loading schedule by these specific orders. The inventory system is then updated by the inventory clerk who uses the shipping documents as the basis for entries into the inventory system.

III. Recommended Software and Hardware System:

The ideal software system for Riordan Industries will be a simple to use inventory system that allows for entry of all phases of manufacturing from receiving to inventory, building, rebuilding, on hold waiting for custom parts as well as shipping. The present system results in inventory being entered more than once and is unable to automatically place orders to suppliers requiring more on-site employees which are not cost-saving in relation to salaries being paid that could be automated processes. Furthermore, connecting the inventory and accounting systems all information as to inventory and cash flow is immediately tracked in one process. Further the connection of the system to warehousing within the company the ordering system for customers, ordering system to suppliers and as well to the shipping department within the company will enable the management of the company to be end-to end type management where each transaction is only dealt with one time throughout the company instead of being entered each time it affects an aspect of the company such as shipping, receiving, inventory, accounts payable or receivable and so forth. Not only is there less work involved requiring less employees and less overhead costs there further is less opportunities for the commission of errors on the part of company employees. The ideal system for the companies after giving due consideration for the distance separating the locations is that of Web Services with industry-standard protocols. The option is given in these type services for the building of all or only part of the application by the developer which means that every part of the ideal solution does not have to be supplied by the company. The invocation of Web services are via the Internet by the industry standard protocols which are inclusive of "SOAP; XML and Universal Description, Discovery and UDDI or Integration."

{2004 Microsoft Net (2004) Driving Business Value from the Microsoft Platform) Also according to Microsoft Networks a developer describes these type Web services as "self-describing software modules, semantically encapsulating discrete functionality, wrapped in and accessible via standard Internet communication protocols like XML and SOAP if you ask a business leader who has implemented Web service-based solution ... You'll hear that Web services are an approach that helps the business connect with its customers, partners, and employees. They enable the business to extend existing services to new customers [and] they help the business work more efficiently with its partners and suppliers [by unlocking] information so it can flow to every employee who needs it [while] reducing the development time and expense for new projects."