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Mrp: Intergrated Business System

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Service Request: MRP System

CIS 319: Computers and Information Processing





Business Requirements 4

Inventory Tracking

Service Tracking


Sales Orders

Purchasing Orders


Production Manufacturing

Solution Design 9

Cost Analysis 10

Implementation & Testing 12

Training 13


Appendix A: Riordan Manufacturing AS-IS Diagram 17

Appendix B: TO-BE Diagram 18

Appendix C: Sales Order Processing 19

Appendix D: Solution Design 20

Appendix E: Gant Chart 21

Appendix F: Implementation Budget 22

Appendix G: Return on Investment 23

Appendix H: Connectivity 24

In 2000, Riordan Manufacturing completed its expansion plan by relocating the entire fan manufacturing operation from Pontiac, Michigan to Hangzhou China. The Pontiac, Michigan facility was retooled to manufacture custom plastic parts. The Research and Development for Riordan is headquartered in San Jose, California. Plastic beverage containers are produced at its plant in Albany, Georgia. The company has seen healthy steady growth with a double-digit profit annually. Key market industries have become international, requiring businesses to adopt strategies to support global exchanges in manufacturing and production techniques.

In order to continue as a prominent leader in the plastic manufacturing industries, Riordan Industries must re-evaluate and trim down unnecessary costs. Riordan manufacturing would like to reduce raw materials and finished goods inventory costs. In Our initial analysis, our management team has assessed the current systems structure and concluded that to resolve rising material requirements and current cost issues an evaluation is necessary for development of a Material Requirements or Planning (MRP) system to track and manage raw materials and a finished product inventory structure across all plants. We would like to execute software and support systems to properly support and maximize our human capital productivity in all Riordan locations.

With our current system, inventory tracking is done through warehouse managers by checking and auditing daily consumptions. Managers in three different locations communicate via e-mails, sending the production and consumption reports, to headquarters that make order adjustment decisions through raw materials suppliers. During the peak or slow season, we need to calculate what type of raw materials needs to be ordered for each location. How many items and quantity of raw materials can be estimated for our US and overseas factory. When are these raw materials required, and when the finished products can be delivered?

The MRP system is to simultaneously meet three objectives. First, the system ensures materials and products are available for production and delivery to customers. The system maintains the lowest possible level of inventory. MRP plans manufacturing activities, delivery schedules and purchasing activities.

Examples of what the MRP system can do for Riordan are:

1. Control the types and quantities of materials they purchase.

2. Plan which products are to be produced and be able to meet current and future customer demand, all at the lowest possible cost.

3. Creates a Master Scheduler, calculating the estimated times of production

4. Reduce the duplicity of entering information

5. Process purchase orders, and track order history

6. Plan the shop workload and spot droughts and traffic in advance

7. Generate sales commissions.

8. Export data into forecasts for special management reports and analysis.


Based on our management analysis report, the rising raw materials cost is generated though increased transportation related costs and higher demand of raw materials from our competitors. In order to lower the material costs and stay competitive in the industry, it is necessary to re-evaluate the quality, cost, and the efficiency of our current suppliers, and browse though other local suppliers to obtain a qualified list of them. With our new MRP system installed, we are capable to retrieve and analyze the efficiency and variable cost of each supplier, which will enhance our accuracy in selecting suppliers.

As our warehouse inventory data indicates there is an average of 15% overstock of finished products, such as fans, plastic bottles, and the reasons are revealed as:

1) Current inaccurate tracking system: Using the requested MRP system to centralize the inputs and outputs, this will alert our inventory department for the proper adjustment of ordering raw materials and maintain the lowest level of our inventory.

2) Peak and off-season forecasts: The current system uses a 3-year historic record to generate future orders. This method creates inaccurate orders as result of the rapid market demand changes. A new system will be able to track the consumption of the finished products periodically and generate the order accordingly.


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