Inventory Management System Proposal

Topics: Supply chain management, Inventory, Supply chain Pages: 7 (2004 words) Published: January 10, 2014

Inventory Management System Proposal
Johnny Scarbrough, Samantha Jarvinen, Taylor Pak, Brandon Dennis, Crystal Taddei OPS/571
June 14, 2012
Elizabeth Farley

June 14, 2012
Riordan Manufacturing, Inc.
One Riordan Plaza
San Jose, California, 95112

Dear Board of Directors,

Thank you for the opportunity to provide a proposal for implementing a new Inventory System Process for Riordan Manufacturing.

The goal over the course of the next three months is to implement a new Inventory Process that will allow Riordan Manufacturing, Inc. to create and deliver electric fans in a more efficient and accurate manner. The implementation of Radio Frequency Identification (RFID), inventory-tracking system will stream line throughput, increase productivity, and reduce production costs. In the current outdated design process, many problem areas in the assembly line process can occur, such as bottlenecks, mistakes, and inaccurate counts. The proposed system will address problem areas by introducing a just-in-time production strategy to improve return on investment. Tracking inventory in real-time as it moves through the supply chain process will ensure reduced overhead of raw material and made-to-stock product. The use of RFID technology will record customer orders, shipping of product, and tracking throughput in real-time. With the proposed RFID systems and wireless software, labor costs reduction, and process efficiencies are the result. Area supervisors will have the opportunity to focus on tasks of greater importance. With the new process, production levels will increase and labor costs will decrease, drastically reducing the process of redundant tracking of material and customer products. Implementing an RFID system will also help reduce manufacturing mistakes by closely tracking all parts required for product assembly. With measurable success and improvement rates, the use of the new Inventory System Process will help in Riordan’s future growth. Thank you for your consideration for this proposal. Please feel free to contact if there are any questions. Sincerely,

Team D
Inventory Management System Proposal
Successful companies manage inventory, labor, and other operational costs by closely tracking them. Failure to manage those items efficiently can cost businesses their bottom line with loss of profit, and ultimately, the risk going out of business. Inventory equates to cash and although it is not as liquid, there is still a cash value associated with each product in inventory (Chase, Jacobs, & Aquilano, 2006). Riordan Manufacturing is in desperate need of updating their inventory system. Initially, when Riordan Manufacturing went into business, this process was efficient only because they were producing on a smaller scale. As a fortune 1000 company, trying to foster business growth, Riordan Manufacturing needs to incorporate innovative 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 known as MRP, software positively can affect a business that relies on efficiencies in manufacturing. “MRP helps enterprises control and streamline processes synonymous with order fulfillment. MRP Software is designed to analyze production demands from current sales orders, short and long term sales forecasts, and then procures the exact information for what is needed to manufacture 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 using Radio Frequency Identifiers, also known as RFID. The RFID tracking system will automate the process of entering data related to inventory. The MRP system will use the RFID system to track the inventory through the process from raw...

References: Barcoding Incorporated. (2011). Work-in-process. Retrieved from
Business Software. (2010). MRP vs ERP: Software for dummies. Retrieved from
Chase, R. B., Jacobs, F. R., & Aquilano, N. J. (2006). Operations Management for Competitive Advantage (11th ed.). New York, NY: The McGraw-Hill Companies.
Schroeder, R., Anderson, J., Tuppy, S., & White, E. (2012). A Study of MRP Benefits and Costs. Retrieved from Schroeder, R., Anderson J., Tupy S., White E. (2012).
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