Riordan Manufacturing, Inc.
University of Phoenix
Systems Analysis and Development CMGT/555
April 27, 2009
History and Background
Riordan Manufacturing, Inc. (Riordan) was founded by Dr. Riordan, a professor of chemistry, who had obtained several patents relative to processing polymers into high tensile strength plastic substrates. Sensing the commercial applications for his patents, Dr. Riordan started Riordan Plastics, Inc. in 1991. Initially, the company's focus was on research and development and the licensing of its existing patents. (Apollo Group, 2006) However, in early 1992, Dr. Riordan, faced with high demand and short supply for the patented plastic substrates and desiring to lower unit costs, decided to expand into manufacturing. Therefore, by end of first quarter in 1992, Dr. Riordan secured venture capital; which he used to purchase a fan manufacturing plant in Pontiac, Michigan. (Apollo Group, 2006) On May 31, 1992, operations had a turning point and the new Michigan plant was at 100% capacity. Demand continued to increase for the plastic substrates while fixed unit costs began to decline, prompting Dr. Riordan to break ground for a plant expansion. Further, the State of Michigan started experiencing soaring unemployment rates due to the state’s largest industry, automobiles, which began laying off thousands of skilled plant workers. Therefore, Michigan decided to offer a million dollar tax incentive to other industries to expand employment and lower the state’s unemployment rate. Riordan Plastics, Inc. was one of the first companies to be awarded the full million dollar tax incentive prompting the June 30, 1992 filing of articles of incorporation in the state of Michigan and legally changing the corporate name from Riordan Plastics, Inc. to Riordan Manufacturing, Inc.
In 1993, the company expanded into the production of plastic beverage containers when it acquired a manufacturing plant in Albany, Georgia. In 2000, Riordan expanded when it opened its operations in China. At that time, the entire fan manufacturing operation was moved from Michigan to China and the Pontiac, Michigan facility was retooled for the manufacture of custom plastic parts.” (Apollo Group, 2006) The Riordan of 2006 is a global plastics manufacturer employing 550 people with projected annual earnings of $46 million. The company is wholly owned by Riordan Industries, a Fortune 1000 enterprise with revenues in excess of $1 billion. The company’s products include plastic beverage containers produced at its plant in Albany, Georgia, custom plastic parts produced at its plant in Pontiac, Michigan and plastic fan parts produced at its facilities in Hangzhou, China. The company's research and development is done at the corporate headquarters in San Jose, California. Riordan's major customers are automotive parts manufacturers, aircraft manufacturers, the Department of Defense, beverage makers, bottlers, and appliance manufacturers. (Apollo Group, 2006)
Recently, Riordan’s leadership held a strategic planning retreat. As a result of this retreat strengths, weaknesses, opportunities, and threats (SWOT) analysis were reported as follows:
Strong consumer demandDepartmental (marketing, human resources, operations, and finance) system incompatibility Internet technologyCompliance with new government reporting Patents on exclusive plastics productsLabor intensive data entry of accounting information Leader in plastics manufacturing industryFinancials are not issued until 15-20 days after the end of the month Strength in capital spendingWeak labor market
New finance and accounting system networkDepartment of Defense spending with competitors Reduce labor intensive data entryUnited States dollar exchange rates, reduction in economic growth Financial statements issued 10...