Riordan data is fed into the inventory system

Riordan manufacturing was opened in 1991 in San Jose, California. It has since then been involved in manufacturing of plastic products used for automotive, appliance and aircraft parts. In addition, it produces plastic materials which are used in medical sectors and in beverage companies.

In order to attain a future of profitability and growth, the company has set its goals which include; focusing on research and development and good customers and employees relationship. Riordan Manufacturing uses various accounting tools to measure its performance. One of the most important approaches is ratio analysis.

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This involves examination and interpretation of correlation between numerous financial variables, by shareholders or creditors. Riordan uses ratio analysis to benchmark itself in the market. Some of the ratio analysis uses in Riordan Manufacturing include: liquidity ratios, such as current ratio, and quick ratio, to measure its solvency levels. This is done by taking the current assets and current liabilities to ascertain the various ratios; it also measures its debt structure, which is measured by dividing the net debts against the net assets; Riordan expresses its gross margin as a percentage. The profit margin is net sales less the operating expenses during that period; and profitability ratios to show the profitability of the company during a particular accounting period. Some of the profitability ratios used by Riordan Manufacturing include; return on assets, debt ratio, earnings per share and dividend payout ratio. Riordan uses these tools to identify changes in the company’s operations and the trends in the market against other companies. The companies systems are interconnected and dependent, and they are functional from the reception of the raw material shipment to the release of the finished products.

The sub-systems involved involves passing the incoming material’s documents, from the deliverer to the receiving staff who compare the document against the order and in validation, the data is fed into the inventory system by the inventory clerk. In addition the information regarding the amount of raw material used and the number of assembled produced are submitted to the clerk who inputs the date into the inventory system (Docstoc, 2010). When a sell is in process, the information concerning the customer and the amount ordered are entered into the shipping and billing systems by the sales system. Accordingly, the shipping system produces a document from the inventory system based on the amount ordered. After the ordered goods have been loaded into the truck the trucks number, date and time of departure are fed into customer’s billing system. Later upon shipment, the copies of order are entered into the inventory system.

In addition, to verify the amount of raw materials, assembled and finished products, an annual physical inventory is carried out against the figures of inventory system. To facilitate this, the department uses two types of desktop computers, which are the “Dell Optiflex computer with Windows 2K operating system and Compaq Presario’s operating on Windows 98 and Microsoft Office.” These systems are used by different facilities, where each facility and individual members of the sale team uses a variety of softwares and procedures to gather the customer’s information and to trace down sales. The whole IT system, involved in the receiving of raw materials and release of produced goods is used by all the three Riordan companies in Georgia, Michigan, and China, although they produce different commodities. However, the sub-systems involved, which are; reception, inventory, manufacturing, branding and delivery, require some improvement to make the whole process successful. For instance, the reception does take a lot of time in comparison on the delivered materials and their order.

A more integrated method of electronically weighing the material delivered could save the company a lot of time for other processes (Docstoc, 2010). This can be achieved by comparing the weight of delivered goods and the ordered weight. In the inventory, the weight of the delivered good will be noted and since each plant processes one product the finished manufactured good can be compared against the weight. Moreover, the sales department needs to install software that will compare the customers’ information and the market demand to production system records to determine the amount to be produced.

This will curb the problem of dead stock, a major problem in Riordan manufacturing process. In the same case, there should be a connection between the inventory system and the production system. This will enable the production team to assess the quantity needed to avoid the loss incurred in holding finished products. Also, the connection needs to be extended to delivery department, on which automatic hand sensor should be used to delete the released products from the inventory system. This will save time used in feeding the information manually.

Reference list

Docstoc, (2010).

Improving Riordan’s Networks. Riordan manufacturing business systems. Retrieved from


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