Inventory Management System Proposal

The goal all over the course of the next three months is to implement a modern origin Process that give totallyow Riordan Manufacturing, Inc. to create and deliver electric fans in a to a greater extent expeditious and exact manner. The carrying out of Radio oftenness Identification (RFID), catalogue- lead-ining arrangement leave alone stream margin throughput, increase productivity, and snub outturn represents. In the current outdated design parade, many fuss areas in the assembly line subroutine can occur, such as bottlenecks, mistakes, and inaccurate counts.The proposed corpse go out address problem areas by introducing a just-in-time achievement strategy to purify return on investment. Tracking neckcloth in real-time as it moves through the supply chain mathematical attend to ordain ensure shortend overhead of stark naked material and made-to- nervous strain product.The routine of RFID technology get out record customer orders, shipping of product , and tracking throughput in real-time. With the proposed RFID administrations and receiving set parcel, bray cost reduction, and touch on efficiencies are the result. Area supervisors exit have the opportunity to focus on taxs of greater importance.With the new touch, production levels pull up stakes increase and labor costs will come, drastically reduction the process of unembellished tracking of material and customer products. Implementing an RFID outline will similarly help reduce manufacturing mistakes by closely tracking all parts required for product assembly. With measurable success and improvement rates, the determination of the new Inventory System Process will help in Riordans future growth. Thank you for your consideration for this proposal. Please feel allow to contact if there are any questions.Successful companies manage stemma, labor, and other running(a) costs by closely tracking them. Failure to manage those points efficiently can cost phone li nees their bottom line with loss of profit, and ultimately, the risk issue out of business. Inventory equates to cash and although it is not as liquid, there is shut away a cash value associated with each product in strain (Chase, Jacobs, & Aquilano, 2006). Riordan Manufacturing is in desperate need of updating their inventory transcription.Initially, when Riordan Manufacturing went into business, this process was efficient only beca exercise they were producing on a smaller scale. As a heap 1000 go with, trying to foster business growth, Riordan Manufacturing unavoidably to incorporate forward-looking technologies for their inventory control processes.The inventory process Riordan uses, require many redundant activities necessary for tracking, throughout their supply chain. MRP Material Resource Planning, also cognise as MRP, packet positively can affect a business that relies on efficiencies in manufacturing.MRP helps enterprises control and streamline processes synonymo us with order fulfillment. MRP packet is designed to analyze production demands from current sales orders, short and pine term sales forecasts, and then procures the exact information for what is needed to comprise each order (Business Software, 2010, p. 1).MRP is a system that Learning Team D is proposing Riordan Manufacturing implements to improve productivity and efficiency. The MRP system will help to support the new inventory system of employ Radio Frequency Identifiers, also cognize as RFID.The RFID tracking system will automate the process of go into info related to inventory. The MRP system will use the RFID system to track the inventory through the process from raw materials fetchd, to molded, assembled, and shipment of the delivered product. In addition, the MRP system will use data from the sales department to calculate how untold time required for producing the customers order. As part of the software, data is stored about delivery timelines for both how long it will take to receive raw materials and how long it will take to ship product to the customer.In addition, the system will calculate the materials needed for product assembly, and the timeframes to complete that assembly. By end these calculations within the MRP system, manufacturing process optimization, limiting inventory on-hand and maximizing the inventory upset time. Process Design Creating a new process design will allow Riordan to become more(prenominal) efficient, reducing the inventory on hand. The process design will have a direct and immediate exit on the customer (Chase, Jacobs, & Aquilano, 2006).One main metric that will identify the process is time because it calculates the work-in-process divided by the throughput rate. As a service supplier of product, Riordan wants customers to have shorter wait time, and to reduce the organizations investment cost by turning inventory over as quickly as possible. Riordan will fine-tune the inventory process by performing task at a parallel process. Most tasks can ensnarl in sequence that will reduce the waiting time and improve production. some other change would be the order of the task in the inventory process.This will eliminate the back and forth transportation from machines, locations, and departments. In addition, fewer interruptions in the process will prepare purchase orders faster to avoid adding special(a) age to keeping inventory longer than needed. In these changes, the assembly line will increase productivity and reduce inventory cost.Applying the lean production process will achieve in high spirits volume production utilize minimal inventories of raw materials, work-in-process, and finished good (Chase, Jacobs, & Aquilano, 2006). The use of RFID will vivify a world-shattering role for optimizing Riordans inventory commission system.The process will work efficiently when demands are at a high quality and builds stronger relationship with the vendors to create the demand for the pro duct. Generally, Riordan will have these tools along with implementing the MRP system to manage inventory flow process. This will create the process of identifying any bottlenecks through the inventory, packaging, labeling, and shipping process. In addition to the MRP system, Riordan will also include the RFID scanning system to improve the technology aspect of the business. append ChainRiordan will benefit greatly by implementing an RFID scanning system. Converting the inventory system to implement newer technologies will increase process throughput. Transition to the RFID system will improve Riordans opportunity to compete in the global market.Tracking inventory on paper is not efficient, especially when information gathered needs updated in China by close of business each day. The use of RFID through the Internet, improves Riordans opportunity for growth, keeping track of every item in inventory. With an RFID system, real-time trending and forecasting will be possible.Computer s oftware apply in conjunction with hardware devices monitor the use of inventory more accurately by continually scanning and uploading data. With the use of RFID, Riordan will reduce loss of inventory or wasted product by shot control limits.Ultimately, reducing labor costs and increasing profits. In well-nigh industries, labor is the one of their biggest expense. The inventory clerk positions could have a significant reduction of labor hours and even eliminate the position entirely with an electronic process. The amount of time spent tracking inventory goes from minutes to perfect seconds because of RFID technology.As Riordan continues to grow, it is important to established centralized ware kins in key locations. The inventory software will help Riordan executives forecast how much inventory one ill-tempered warehouse could handle, more effectively than the current method used. Inventory counsel is the key focus for process improvement.This new inventory management system wil l reduce labor cost by streamlining data entry, therefore, focal ratio transaction time, and ultimately, reduce the amount of inventory on-hand. Packaging, labeling, and shipping will imply incorporating a new inventory management process.Combining handheld computers, RFID readers, software, and a wireless infrastructure gives supervisors the ability to monitor inventory and track each operation within the manufacturing process. By connecting a wireless infrastructure, the application will operate in real-time.Supply chain design will enable Riordan to reduce stock on-hand and improve inventory throughput. Maintaining par levels through forecasting from the materials used, average inventory stock is projected. Demand and supply uncertainties associated with custom products will require a supply chain strategy that incorporates an agile supply chain.Supply chains using strategies aimed at responsiveness, and flexible, overcome the risks of supply shortages by pooling inventory and other faculty resources. As previously mentioned, the current steps for processing raw materials is labor intensive and in many ways, work against the companys long strategy.The use of an RFID tracking system will allow more accurate and real-time information to be readily available. Forecast Forecasting the costs and expected benefits is critical to determining if the project is worthy of investment by a company. This forecast, completed for the implementation of both an RFID and MRP system.There are a play of profit costs for this type of project, including a project manager salary for one month ($3,333), an install technician for two months ($6,600). A trainer for 20 days ($1,640), salaries for 10 technical support agents to be trained over 10 days ($11,000), and salaries for 100 staff agents trained over 10 days.However, the largest cost for this project will be the technology itself. To install an RFID system the following will need purchasing active tags at the price of $ 10 each for 100 in total, five $500 readers, and the middleware that coasts $100,000. The MRP software will get down the biggest price of $300,000.The total costs of implementing the project will be $536,139. Obviously, these costs are only beneficial to the company if they bring about a positive change to the companys income. The implementation of the MRP and RFID system allow the elimination of the inventory clerk position, saving the company $45,000 annually.In addition, supervisors will be more effective as the labor intensive reports are eliminated, saving the supervisors 40 hours a month and the company $959 a month. The manufacturing team will also benefit from the elimination of these labor-intensive reports. Its estimated that the manufacturing team will save $574 a month. In addition, because of the expected efficiencies with managing inventory Learning Team D predicts that one facility, currently used to house supplies, is no longer needed saving the company $8,000 month ly, in leases.According to a survey of more than 600 companies, Riordan can expect a number of change magnitude efficiencies. Perhaps the most telling increase to performance is that delivery times will be reduced from 71 days to 59 days on average (Schroeder, Anderson, Tupy, &White, 2012, p. 1). This means that Riordan will be able to improve order processing by 17%.With profits already at $1,956,371 (Apollo Group Inc.) annually, a 17% increase would result in an additive $163,031 monthly in profits. Keeping all of this information in judging Riordan would see a return on their investment in most 13 months.ConclusionThe new tracking system will help in supporting the principles in strategic strength planning by allowing Riordan to decrease the waste of resources, such as ordering too many raw materials, using facilities as storage, and using labor hours for data entry. Improving Riordans inventory control process will produce a more efficient supply chain management, translati ng into increased customer satisfaction.Both strategic capacity planning and lean production play an integral part in the improved inventory system at Riordan. The strengths for Riordans new process will increase productivity, and enhance the products life cycle. Building a die strategy will open the door for further growth opportunities.It will take a team to develop the strengths and opportunities of the new inventory management process. Measures of changing the supply chain design by adding the new RFID to Riordans inventory system will become the reason for Riordan becoming the leader in the electric fan industry. (Note see appendix A for Gant chart)