Rfid Inventory System

Running head: RFID Inventory System

Riordan Manufacturing Inventory System: RFID-based Tracking

Executive Summary

The primary weak-link in the value chain of Riordan Manufacturing is the manufacturing process of raw materials inventory tracking. Currently the raw materials arrive and a series of written reports are produced for the Inventory Clerk who then re-produces those reports during a data entry process into the Inventory Office PC (see Figure 1). This system continues through the chain of manufacturing from the point the raw materials arrive until the final product has been assembled and shipped. This method yields a system that is data redundant, prone to human error on the data entry level, and presents an opportunity for the data to be misinterpreted by the Inventory Clerk for the raw materials ordering. Additionally, few to zero records are being produced that will enable analysis of inventory levels (Riordan Manufacturing).

Figure 1 Ð'-Data flowing from

Forms to the Inventory Clerk

to the Inventory PC

The purpose of this project will be to improve the manufacturing process by implementing a new computer-based resource tracking system that will eliminate the need for the Inventory Clerk to re-produce the forms into the Inventory PC. The new system will allow the Inventory PC to do the tracking of raw materials upon arrival throughout the manufacturing process. Raw Materials can then be ordered based on known inventory levels, historical data of typical customer orders, and a number of other factors that will be immediately accessible through the new system.

Another key advantage to the new system will be the ability to quickly account for misplaced or misreported inventory. Because the new system will immediately be able to identify lost inventory, managers can immediately track the inventory down and be able to identify trends if materials are repeatedly lost at a certain point in the manufacturing process.

Riordan Manufacturing has an opportunity to develop a stronger value to its stakeholders by fine-tuning its manufacturing processes. The stakeholders that will be the most significantly impacted at the offset will be the managers and ultimately, in the longer-term, the customers will see an improved service and product. Managers will be able to focus a greater level of their attention on the manufacturing process while the new system automates the clerical process involved in tracking inventory. Customers will eventually be impacted because the increased efficiency at the manufacturing level will reflect in a stronger product and reduced costs.

Business Requirements

Riordan Manufacturing has specific opportunities to develop a system to enhance the inventory processes currently in place. For Riordan to remain competitive, though, it will require a shift to a more efficient system for inventory tracking. The key questions to be answered in this process are,"What systems need to be revised?" "Will the new system actually create competitive advantage?" "Will the transition to a new system be worth the change?"

To begin with, the paper-based system presently being used has been sufficient for tracking inventory to date. The paper-based system has key elements that should be preserved. The users involved in collecting the data for the inventory system is satisfactory. What needs to change is the method of data collection and data entry.

System Investigation

An investigation of the current paper-based system reveals a redundancy in the data entry process. By requiring the shipping area supervisor to fill out an orders received form and then require the inventory clerk to reproduce this document into the inventory PC, the data has been produced twice.

This superfluous data entry step is present in the second stage of the manufacturing process: the inventory usage stage. Here, the manufacturing staff remove raw materials out of inventory and are required to produce a form that is reproduced by the inventory clerk into the inventory PC. Here again the data is collected and entered in separate processes.

The final two stages of the manufacturing process, final product additions and shipping orders, also have separate data collections and data entry stages.

For Riordan Manufacturing to make the inventory process more efficient, the data collections process and data entry are going to have to be combined in the form of a digital document that can be easily stored in a database. Additionally, technology purchases will need to be made to enable the manufacturing staff to quickly collect and enter the data into the system.

Feasibility

A new computer-based system is feasible because the staff and basic procedures for collecting data are already in place. The staff is already trained to inspect shipments, document inventory usage, and process orders. The procedures for all staff will be similar with the only changes being to how the data is collected and entered.

Additionally, the inventory PC is already in place allowing the new digital system a higher degree of realistic implementation. Already having a computer-based data entry point will allow for easier integration of a new system because the data is already being stored digitally.

Benefits

Implementing a new system that reduces data entry redundancy provides the benefits of reduced labor, and more reliable data entry.

The new system will reduce labor because fewer staff will be required for data entry. The new system will enable the manufacturing staff to quickly collect the data and enter the data into the system in a single process. This reduced cost in labor will result in a more efficient inventory system enabling reduced cost in final product.

More reliable data entry is another result of the new system. With fewer opportunities for data entry, human error is reduced. More reliable data will result in more reliable inventory stocking information. With more reliable data, the new system will result in a more efficient inventory system due to reduced potential for human error.

Summary

For Riordan Manufacturing to choose a new system for data collection and data entry for the inventory system, the new system must meet the following criteria: it must reduce the amount of steps for data collection