Executive Summary
Company Background
Riordan Manufacturing, Inc. was founded in 1991 and is a leader in the field of plastic injection molding. The company’s current locations are in Albany, GA, Pontiac, MI, Hangzhou, China, and it headquarters in San Jose, CA. The company is 100% owned by Riordan Industries and has over 550 employees. The customer base for Riordan includes automotive parts manufacturers, aircraft manufacturers, Department of Defense, beverage makers, and bottlers and appliance manufacturers.
Business/Product or Services
Riordan Manufacturing, Inc. researches and creates plastic injection moldings.
The Company produces/provides the following products/services:
- Plastic Bottles
- Fans
- Heart Valves
- Medical Stents
- Custom Plastic Parts
Presently, our products are in the maturity stage. They compete primarily based on our cutting edge standards. Our future plans include developing a more improved inventory process.
Current Inventory Process
Riordan Manufacturing, Inc. current process is an outdated, manual process that is time consuming and not financially responsible. The process relies on manual entry at the end of each business day by the warehouse department. Each of the locations within the company operates independently of each other with no inner company communications. Each warehouse department has its own inventory which could result in over purchasing of materials that another location could have overstocked. The receiving of materials process is slow and time consuming. A receiving department employee has to visually inspect the paper work and verify that all materials arriving are on the manifest. These processes are paper based that could result in lost time and money if papers are misplaced or lost.
Proposed Solution
This outdated system needs to be updated so that it can compete in the global markets with first class technologies. The updated system will launch Riordan into the 21st century with a technologically advanced inventory system. A computer based program will replace the manual paper system. These new processes will increase efficiency, lower cost, send out automated updates and most importantly interface all departments and locations together. The new system will have functions that will include, but not limited to, shipment tracking, receivable tracking, product location tracking, and inventory level tracking. This system will utilize tools like bar code scanners, smart handheld devices, and user friendly computer interface.
Stakeholders
- Sales department
- CEO
- Executive management
- Warehouse manager
- Shipping manager
- Customers
- Current shipping companies
Background
Business Requirements
The current receiving, manufacturing, and shipping process throughout all Riordan plants are predominantly manual and batch oriented. The manual processes are prone to error and are labor intensive. The batch oriented nature of the processes lead to issues with regard to inventory accuracy and this causes issues with the raw materials ordering process. In addition, the annual physical inventory process is very costly across all of Riordan's facilities.
To address the above issues, we have identified the following as business requirements. Automate all manual steps performed in the receiving, manufacturing, and shipping processes. Make use of current technology such as bar codes to aid the automation. Provide a real-time view of inventory. Improve the accuracy of the inventory and replace the annual physical inventory by implementing an inventory auditing procedure based on a generally accepted cycle counting methodology. Implement a common waste handling procedure across all facilities. Increase productivity by ensuring inventory is on hand when required.
Drivers
The primary business requirement driving this project is to remove all manual steps within the inventory management processes. Addressing this business requirement will provide Riordan with a lower error rate and more accurate system data. More accurate data will provide a noticeable improvement across all areas of the business.
In addition to more accurate data, Riordan will also recognize an improvement in productivity as well as a significant cost reduction by removing the end of year physical inventory process. As Riordan matures as an automated organization, they will likely see opportunities to reduce or refocus human capital.
Riordan must adopt proven best practices in regard to inventory management. According to Russell (2007) ”Modern supply chains are customer-driven pull systems. The focal firm’s supply capabilities must be synchronized with known and forecasted demand patterns of downstream customers." (p. 60) (Russell, S. (2007). The FlexNet solution will help Riordan to become more customer driven.
Strategic Role
The proposed implementation of the FlexNet system in Riordan's China facility is the first step of a company-wide transformation from manual to automated. This system will be rolled out to all of Riordan's plants across the world.
The benefits of this implementation have been discussed throughout this paper. In addition to the improvements in the inventory management process, we are positioning Riordan to be able to take advantage of addition strategic benefits available from the FlexNet system.
This includes business intelligence, labor management, paperless manufacturing, quality planning and execution as well as LEAN material flow that will provide Riordan with the ability to quickly adapt to changing market conditions. This will enable Riordan to be focuses on delivering what our customers need when they need it.
Proposed Solution
Description
The reconstruction of Riordan manual handling process with Apriso’s FlexNet Production and FlexNet Warehouse will introduce flexibility, mobility, and efficiency with time and expenses toward the inventory system. The new system will be modernized with computers allowing Riordan to compete in global markets with first class technologies.
A new inventory management and production control system is being implemented to maintain consistency and quality at all Riordan’s plants. The receiving, manufacturing, and shipping processes will make use of current technology such as bar codes to aid the automation, tracking of receiving and shipping numbers as well as product location. FlexNet will provide a real-time view of inventory to refrain from physical errors and employees expenses, and install hand devices that will improve productivity by allowing communication to business partners and ensuring inventory is on hand when required.
FlexNet Production provides manufacturing expertise to the entire supply network. Flexnet Productions allows Riordan plants to trace and ensure quality by utilizing the Manufacturing Execution System (MES). This system allows enterprises to manage production on a global scale. FlexNet will streamline Riordan operations with real time visibility, paperless manufacturing and electronic work instructions that will improve resource management and mold production with better planning.
FlexNet Production and FlexNet Warehouse are perfect together providing Riordan enterprises with real-time and visual of inventory tracking, material flows and many other warehouse processes. FlexNet warehouse improves Riordan’s inventory control and production requirements which satisfies customer demands and eliminate paperwork, improve productivity, increase accuracy, reduce inventory, and cut labor costs.
FlexNet Warehouse will compliment Riordan’s enterprises with full control over warehouse operations as well as other operations the warehouse interacts with. Operations will have: reduced work in progress (WIP) in the plant, better cycle timing, fewer errors, increased productivity, simplified reports, and full control over internal processes, inventory positions and movements.
We are also incorporating mobile devices due to FlexNet for Android® and iOS®. Employees will be able to check inventory, pricing, product availability and deliveries on their Android® and iOS® mobile devices. The connection will be Wi-Fi based using WPA2 Enterprise utilizing 802.1x authentication protocols for cyber threat prevention. The costs for these devices are inexpensive and the Apriso FlexNet Mobile is included with the implementation. Riordan will benefit from this application because it will include production, warehouse, maintenance, and time and labor; FlexNet’s main functions of operations.
Information Use
Riordan enterprises currently utilize an outdated manual process that is costly and harsh on time consuming. The process relies on manual entry and the duties at the warehouse. Unfortunately this process invites room for error based on employee work ethic and over purchasing on material due to the fact that each department contains its own inventory.
Now with the new system, utilizing FlexNet Production, FlexNet Warehouse, and FlexNet for Mobile devices, Riordan is granted the opportunity to compete with global markets with first class technologies and finally be launched into the 21st century with a high-tech inventory system. Implementing these new systems will enable Riordan plants to automate manual steps in the receiving, manufacturing, and shipping processes. Modern technologies, such as FlexNet Mobile, will provide real-time visualization of all operations.
Security and Ethical Concerns
Meeting and Exceeding Global Industry, Regulatory and Government Standards. Apriso is committed to interoperability across multiple platforms and software applications. As part of achieving this objective, the Apriso FlexNet platform is compliant in working with non-proprietary technologies. Apriso strives to comply with major software industry standards, and continues to maintain this functionality with each successive release of FlexNet ("Apriso", 2012).
Manufacturing Execution System or MES Standards ISA 95
Apriso designed FlexNet as a global solution for manufacturing operations management. Designed and built as a platform-based solution, FlexNet supports a suite of applications that manage and execute manufacturing operations associated with Production, Quality, Warehouse, Maintenance and Time & Labor.
Recognizing the need for industry standards and consistency when integrating shop floor operations to enterprise applications, the product design team at Apriso paid close attention to the evolving ISA-95 standards to ensure alignment, which is the case today. Apriso is currently a member of the International Society of Automation (ISA). Apriso was the first North American MES company to be ANSI/ISA 95 NetWeaver certified by SAP ("Apriso", 2012).
OPC
OPC (originally OLE for process control) is an industry standard created with the collaboration of a number of leading worldwide automation hardware and software suppliers, working in cooperation with Microsoft. The standard defines methods for exchanging real-time automation data between PC-based clients using Microsoft operating systems. The organization that manages this standard is the OPC Foundation.
Apriso’s FlexNet is "Compliance Certified," according to the OPC Foundation. FlexNet has passed a series of Independent certification tests including interoperability, compliance, performance, stress, white box, behavior, environment and usability testing. Products are only awarded the Compliance Certified status when all interfaces they support have passed the Independent Certification Test Lab testing. The OPC Foundation "Certified" logo is used under license agreement, demonstrating official certification ("Apriso", 2012).
Electronic Industries Alliance (EIA)
FlexNet Machine Integrator is compliant with serial link standards as key machine and various device communication standards. It provides standard configuration, minimizing the need for custom driver development. FlexNet can be connected to RFID readers and writers using TCP/IP or serial links, configured with FlexNet Machine Integrator. FlexNet supports EPC Global Tag Data Standards version 1.3 and Tag Data Translation version 1.0, in addition to Universal Product Code (UPC) ("Apriso", 2012).
Web Technologies
FlexNet utilizes the most current Web technologies, having embraced Microsoft .NET since its inception in 1999. Users can leverage the de facto standard Internet Explorer to access FlexNet functionality or alter its configuration. Web technology support extends to each of the most common protocols, including: HTTP, XML, XSLT and SOAP. The FlexNet platform is a Services Oriented Architecture (SOA), and supports Web services integration capabilities embedded throughout its platform. FlexNet's Adaptive Business Process Management (BPM) platform supports the publishing of business processes as Web services, as well as consuming Web services within business processes ("Apriso", 2012).
Governance
Apriso customers use FlexNet to report production and inventory status. FlexNet is a key component of the information chain fueling financial management reporting requirements for companies adhering to Sarbanes Oxley compliance. The FlexNet security framework and audit trail capabilities are key components that ensure information is secure, valid and not modified without a sufficient audit trail. Apriso diligently maintains industry, government and other standards requirements in FlexNet. In addition, security access, audit trail, process traceability and genealogy management capabilities are available ("Apriso", 2012).
Internet and Mobile Application Support
The main idea for Riordan to upgrade its current system on operating inventory is so that Riordan can leap with firm sturdy steps into the 21th century. With this new system Riordan will have an up-to-date system that will allow flexibility and mobility within the walls of the production area. This will ensure Riordan to keep Six Sigma process intact, identifying and removing what causes errors; which is Riordan’s current system. The updating of Riordan’s outdated system promises to allow an efficient way to manage and maintain the manufacturing environment.
Riordan will also be able to increase accurate real-time inventory count and will reduce unwanted mistakes. With the real-time recording of inventory, Riordan can deliver goods with precision and accuracy. The replacement of Riordan manual materials handling process with Apriso’s FlexNet Production and FlexNet Warehouse will unlock a very convenient way to manage business. In most business settings workers are mostly attached to their desktops.
Now with the new FlexNet Mobile, Riordan employees no longer have to be making inquiries on their desktops abandoning the production area. Employees will be able check inventory, pricing, product availability, deliveries details on their mobile devices. It can be a smartphone or a tablet. The cost of these devices is fairly feasible. The use of a mobile device will provide more freedom to employees on the floor area.
With the launch or Apriso’s FlexNet Mobile, paper inquiries will be at a minimum and paperless requests can be done. The overall idea is to provide faster service practically anytime and anywhere. Riordan can greatly benefit from this application as it will include FlexNet main functions of operation. It will include production, Warehouse, Quality, Maintenance and Time and Labor.
With the assistance of Apriso’s Flexnet production, FlexNet Warehouse and FlexNet Mobile applications; Riordan will be able to leap into the 21th without any difficulties and will be able to keep its clients very content with the services provided and allow flexibility and mobility.
Proposed Process Changes
In order to ensure consistency of operations and quality control at all Riordan plants, a new inventory management and production control system is being implemented. These common set of procedures have been developed for the management of receiving raw materials, tracking products during manufacturing, and accounting for the finished goods inventory. In addition, this new system will eliminate waste both in inventory and production.
Raw Materials Receiving
Raw materials are received at the receiving area for each plant. Prior to receiving any raw materials, an order is imputed into the Flexnet Warehouse system. This order would be submitted to the supplier electronically. The supplier would respond back with the quantities and the time of arrival.
The arrival time is crucial for traffic management at the receiving area. All containers have 2 barcodes applied at the supplier, one that contains the shipping information and one that contains the actual product information. At the time of delivery, the truck driver will pass the shipping documents to the Riordan shipping area supervisor who will scan the barcode on the manifest.
Each container has the same barcode corresponding to the manifest. An additional barcode is on each container corresponding to the type of material in the container and the shipped weight, volume, or quantity depending on the material. All of this information is electronically entered into the system from the handheld scanner. Since each plastic pellet container has the same amount of product, the weight is an accurate inventory control method. Those containers are weighed at receiving and checked against the shipped weight.
The following flow diagram describes the receiving of raw materials process at all plants.
Manufacturing with Inventory
The raw materials and sub-assembly inventory is drawn upon during manufacturing operations. The amount of raw materials and sub-assemblies used during each manufacturing run is entered into the inventory system by either a workstation or a handheld device. This provides real-time inventory usage.
As completed products come off the line, they are barcoded, automatically scanned, and entered into the inventory system indicating the number of sub-assemblies and final products completed in real-time.
The following flow diagram describes the usage of raw materials and sub-assemblies processing at all plants.
Final Product Shipping
As the sales department completes orders, the sales orders are entered into the customer shipping and billing system. Those orders are then transmitted to FlexNet Warehouse for fulfillment.
After orders are fulfilled and loaded for shipment, the truck number, date and time of shipment are updated into the customer shipping and billing system and FlexNet Warehouse for tracking purposes.
Each quarter, a physical inventory is conducted in order to reconcile the quantities of raw materials, sub-assemblies and finished products on hand with the inventory system.
The following flow diagram describes the shipping process at all plants.
Information Flow and Access Control
Since Riordan has chosen to not replace their existing ERP system, access control will be provided by the existing infrastructure. Apriso’s FlexNet product will integrate with the existing ERP system and utilize the access control mechanisms already in place. Below is a process flow of how the information will flow between FlexNet and the ERP system.
System Acquisition and Maintenance
With proper training of your employees on the Flexnet system, should cut down on system maintenance. With more than 70% of their employees in technical positions, Apriso can support your organization from almost anywhere in the world. Their educational professionals offer comprehensive product training to help you learn how to implement, configure, and maintain your FlexNet® system. Regularly scheduled classes are held at Apriso's worldwide or regional headquarters, or at your site ("Apriso", 2012).
Implementation
Apriso has worked over the last 15 years with its network of partners and integrators to develop and refine the FlexNet Accelerated Services Track (FAST) methodology. FAST is Apriso's proven rapid implementation program and is one of the key reasons FlexNet deployments are the fastest in the industry ("Apriso", 2012). Implementation starts with:
- Assembling a project team
- Developing measurable goals, acceptance criteria, and test scenarios
- Gathering requirements and documenting your business processes
- Scheduling an Apriso project management plan
- Creating a quality assurance and change management process
- Educating your staff on the technology and transferring knowledge to your staff.
Customer Support Programs
Apriso's Software Product Maintenance & Support options are world-class. Their goal is to deliver the most comprehensive support and training options available in the market today. To date, they support more than 400 customer locations worldwide with a comprehensive network of global support and training centers, highly skilled personnel and a uniquely structured support offering ("Apriso", 2012).
System Upgrades
All customers have access to full-version upgrades, as well as maintenance releases, patches, and fixes. This level of support provides investment protection for Apriso software from ongoing product upgrades to licensed modules. In addition, you have access to a skilled support organization structured to collaborate with your personnel in the successful use of Apriso application software, associated hardware, and relevant third-party software ("Apriso", 2012). They offer:
- Software product updates, enhancements and maintenance
- Level One services
- Level Two & Three support services
- Telephone assistance and support
- Online and traditional documentation and training
Customized Support to Fit Your Needs
Apriso's support centers can customize an offering to meet your specific needs. Their options include:
- Silver (Standard) Support - available eight hours a day, five days a week
- Gold Support - includes all the benefits of Silver Support plus 24 hour availability, five days a week
- Platinum Support - includes all the benefits of Silver and Gold Support, plus 24 hour availability, seven days a week
Telephone Support
Telephone Assistance and Support Services offer phone access to our skilled staff of analysts for problem reporting, determination and resolution. Support is also available via email and Web ("Apriso", 2012).
Support Benefits at a Glance:
- Continual product repairs via service pack releases
- Cost effective, flexible, and customizable extended support
- 24x7 access to customer support service center
- Secure, 24/7/365 access to our customer support Web site for case input and management, knowledge base retrieval and documentation
- Experienced, knowledgeable, and committed support analysts
- Ongoing product development for new modules and enhancements (more than 80,000 hours of Research and Development completed annually)
Success Stories
Amcor
Amcor is proud of its tagline: “Innovative packaging.” In fact, its inventive culture helped the Australian-based firm become one of the top three packaging companies in the world. So, when faced with the complexities of globalization and large-scale acquisitions in 2002, Amcor’s PET (Polyethylene Terephthalate) division chose to think outside the box – or in their case, the bottle – becoming an early adopter of Apriso’s FlexNet solution.
The Apriso FlexNet solution is much more than just a Manufacturing Execution System, or MES, managing everything from production, warehouse and quality processes, while integrating data from individual machines all the way into their Enterprise Resource Planning (ERP) system. Amcor faced a serious challenge of rapidly rolling out a solution in a timely manner without disrupting daily operations.
Benefiting from a truly global presence and an enterprise ‘Core’ deployment model, Apriso provided a streamlined implementation to manage and execute manufacturing operations at 46 Amcor PET packaging facilities around the world. These diverse facilities, primarily producing bottles for soft drinks, juices and sports drinks, are served by a common SAP / Apriso configuration (Apriso Success Stories. (2010, June. 24). Amcor Bottles Up Efficiencies).
The Apriso solution offers an innovative, integrated approach to improve quality, execute Lean processes, manage packaging operations and improve operations performance. Amcor realized these benefits by synchronizing production and warehouse functions both inside the plant and across their enterprise. Currently implemented at 50 Amcor PET packaging facilities around the world, Apriso’s WMS for Manufacturers solution integrates with Amcor’s SAP system to synchronize warehouse, quality, packaging and production processes. Benefits include improving visibility of operations while increasing control of material flows and production processes (Apriso Success Stories. (2010, June. 24). Amcor Injects Performance into Warehousing).
SI Flex
Inside your mobile phone, camera, optical pick-up or VCR, you may have a component made by SI FLEX. The company is one of the largest and most dynamic manufacturers of Flexible Printed Circuit Boards (FPCBs) in Korea. SI FLEX is a Tier 1 and/or Tier 2 supplier to industrial giants, including Samsung, LG, Sony, Sanyo and Hitachi. SI FLEX was challenged with efficiently managing their warehouse operations while accurately tracking inventory from logistics through production. Complicating matters further, the manufacturing process uses many chemicals, some of which could be harmful and dangerous to both employees and the environment. Rapid growth had hampered the company’s ability to institute optimal materials handling and management procedures.
Managers had difficulty determining current inventory levels, including the quantity of chemicals on hand. Without this visibility it was difficult to know which materials were approaching safety stock levels, to then trigger a manual process to order new materials. The company went looking for a solution. After reviewing cost, time to deploy and adaptability requirements, Apriso FlexNet was selected as a ‘best of breed’ supply chain execution system.
According to Hangmin Cho, Manager of the Management Information Team at SI FLEX, this decision was based on the three factors: “First, Apriso’s solution is extremely flexible, making it easy for us to quickly change processes in response to shifting market conditions. Second, it is extensible, so can handle all operations, from logistics to manufacturing. Third, the system supports both global and local policy creation, helping us to integrate distributed operations between factories located in Korea and China.” (Apriso Success Stories. 2010, June. 24). SI FLEX Improves Supply Chain Visibility, and Materials Management)
Reference
APRISO. (2012). Retrieved from http://www.apriso.com/products/flexnet_platform/industry_standards_compliant.php
Russell, S. (2007). Supply Chain Management: More Than Integrated Logistics. (Cover story). Air Force Journal Of Logistics, 31(2), 56-63.
Apriso Success Stories. (2010, June. 24). Amcor Bottles Up Efficiencies.
Apriso Success Stories. (2010, June. 24). Amcor Injects Performance into Warehousing.
Apriso Success Stories. (2010, June. 24). SI FLEX Improves Supply Chain Visibility, and Materials Management.
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