Review Of Riordan Manufacturing Business Systems

Team B Review of Riordan Manufacturing Business Systems

Greg Guntz, Jerad Kays, Armando Figueroa,

Lanone Mayfield, Rich Roberts, Bill White

University of Phoenix

BSA/310 Business Systems

Mission/Description

Riordan Manufacturing is an industry leader in the field of plastic injection molding that has earned them international acclaim. (Apollo Group, Inc., 2004,). The mission that Riordan Manufacturing has embarked on will lead the company into the 21st century with a sound footing in the plastics manufacturing industry. In order for Riordan Manufacturing to be able to meet its customer's needs and expectations, there needs to be systems in place that not only focuses on the quality but also the management of the manufacturing process.

With the implementation of the Six Sigma practice Riordan Manufacturing will be able to manage the variations in product output, along with having a system where they will be able to measure, analyze, and control their manufacturing process to within a defined specification. This will lead to an improved product for their customers with a defect rating of 3.4 per million produced or less. (Six Sigma, 2000-2007). Along with the improvements to the products produced, this will also help Riordan control its cost on a per product basis through the adherence of the defined specifications in the manufacturing process.

Unlike Six Sigma which focuses on product variation management, Riordan also is ISO 9000 registered. Being ISO 9000 registered, allows Riordan to adhere to the business standards set forth by the International Organization for Standardization. Six Sigma (2000-2007) stated "The ISO 9000 standards are produced by an international consensus of countries with the aim of creating global standards of product and service quality. These sets of standards form a quality management system and are applicable to any organization regardless of product, service, organizational size, or whether it's a public or private company." (para. 3). This is an ever changing climate where Riordan will be evaluated every three years for certification, which is administered by separate and independent certification bodies. This will ensure that Riordan has one of the best quality management processes. When problems are found or arise in the management process, there is a complete analysis done on the problem, ranging from why the problem arose and the corrective actions needed to fix the problem.

Riordan Manufacturing prides themselves on their research and development, in order for Riordan to maintain their status as having one the best research and development departments; they will need to be creative to their customers needs and be rigorous in the development of innovative solutions for their customers. This will allow Riordan Manufacturing to stay ahead of the competition, and maintain a steady growth pattern for future success.

Riordan not only has a commitment to their customers, by offering their customers' solutions to their plastics needs at an affordable price, but also they ensure that the employees of the company have the necessary tools to promote innovation and a team centered environment. All these factors combined, will enable Riordan Manufacturing to offer their customers a quality product, at an affordable price, with long-term solutions.

Finance and Accounting

After reviewing the finance and accounting section for Riordan Manufacturing I would like to discuss the existing and needed systems for this area of the business. First is the current financial situation of Riordan Manufacturing. I would like to first examine Riordan's income statement. "The income statement is the major device for measuring the profitability of a firm over a period of time." (Block and Hirt, 2005, p.25). For two years in a row Riordan has had a gross margin of over 8.5 million dollars. Operating expenses have gone up in the past year eating into the profit before interest and taxes (from $3,246,122 to $3,042,820). The opportunities for this area would be to focus on sales, quality assurance, and most of all general and administrative expenses. The expenses for general and administrative operations have gone up almost $200,000 in one year.

The next item of focus is Riordan's balance sheet. "The balance sheet indicates what the firm owns and how these assets are financed in the form of liabilities or ownership interest." (Block and Hirt, 2005, p.28). The assets of Riordan have gone up roughly three quarter of a million dollars. These assets have been financed through liabilities or stockholders' equity. (Block and Hirt, 2005, p.28). If the assets are taken and divided by the stockholders equity the result is that the stock price has dropped from $2.78 a share in 2004 to $1.56 a share in 2005. The opportunities for this area would be to reduce long-term debt, which increased over $200,000 in the past year.

The first challenge is to cut the administrative costs, ideally below what was paid two years ago, which was $1,524,066. The fact that the separate entities in Michigan and Georgia are not compatible with each other on the mainframe systems is a glaring problem. This existing system needs to be upgraded or replaced. An even bigger problem is that this information needs to be consolidated at the headquarters in San Jose, which is not happening due to incompatibility. The solution is to spend enough money within the IT department, involving software and hardware upgrades, to eliminate administrative costs enabling long-term debt to be paid causing stock prices to rise.

Marketing and Sales Department

Currently, the marketing and sales department is using many different forms of data collection and recording. The sales that have been made to customers have been recorded using written methods. Riordan has records in many different databases, microfiche and the written files. Riordan would like to consolidate this data into a Customer Relationship Management (CRM) system. At the moment, all the past marketing studies and plans are stored in a filing cabinet in the marketing cabinet. In the sales department, each member maintains his or her own customer records using a wide variety or tools to include paper and pencil. To help Riordan reach the $50 million revenue