Riordan Manufacturing
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Running head: RIORDAN MANUFACTURING
Riordan Manufacturing, Inc.
Riordan Manufacturing is a global recognized company that specializes in manufacturing plastic products such as plastic parts, plastic beverage containers, and plastic fan parts. Riordan maintains a staff of 550 people with projected annual earnings of $46 million. Riordan manufactures its products out of three locations, Georgia, Michigan, and China. The company was founded by Dr. Riordan, a professor of chemistry who obtained several patents that resulted into starting Riordan Plastics, Inc. in 1991 and later changed to Riordan Manufacturing, Inc. in 1993. Currently, Riordan is a fortune 1000 enterprise that is leading other competitors in manufacturing plastics and in order to stay in front of the competition, changes need to be made in certain areas of the business.
Here are the proposed changes that need to be implemented to ensure consistency across the organization, stream line processes for collecting data and help reduce costs in areas where reductions are necessary. After taking a close look into the organizations non-core functions it is recommended that these two projects are outsourced offshore:
Finance & Accounting
Current state- all three operating entities have their own financial systems and at the end corporate are responsible for consolidating the information.
Future state- consolidate all three financial systems into one, which will allow consistency across the organization.
Marketing Information System
Current state- the firm has historical records in many disparate databases, paper files, and microfiche.
Future state- create a CRM system that will allow marketing information to be stored securely and retrieved easier.
Outsourcing these two projects offshore will improve quality of service, reduced IT staffing headcount, and ease the organizations management oversight.
Finance & Accounting Overview
Riordan Manufacturing has three financial systems held at different operating sites. The California site has fully integrated Windows based ERP financial management software, the Michigan site purchased a vendor developed financial management software (vendor is no longer in business) and the Georgia site purchased a vendor developed financial management software (different from Michigan). Here are the problems with this current set-up:
Data is provided to corporate via data files
Data is provided via hardcopy reports and must be re-entered
Data is provided via data files and converted to proper account codes
Finance & Accounting Framework
The recommended solution is to have a new financial management system that allows all three operating sites to have access to the same information, build an optimal business process, and have the compatibility that wasnt available before. To do this, Riordan will allow the strategic vendor resources to learn the current set-up and financial management systems. This will give the resources firsthand experience and knowledge of the systems and how to make the improvements. While the onshore resources are learning the financial management systems, there will be additional offshore strategic vendor resources building process flows and diagrams of the current set-up. This will give the vendors a holistic view of the current establishments and what are the areas that need to be improved. Once the resources onshore have enough information they will return offshore and the vendor will build a new system with all the required components that Riordan needs to run a more efficient business. Meanwhile, the employees of Riordan will still act as subject matter experts (SMEs) as the vendors will still need assistance in the business analysis and development phases. Once the vendor has met all required milestones included in the statement of work (SOW) than a presentation will be made before the stakeholders and decisions will be made during this phase. Assuming the new system is a “go” than implementation will began on the required date in the statement of work (SOW).
Pros for Offshore Outsourcing Finance & Accounting
Cost effective
Allows your business to focus on more essential tasks
It can increase efficiency in financial process
Saves money on labor management(training)
Ability to utilize up-to-date technology & enhance F&A processes
Cons for Offshore Outsourcing Finance & Accounting
Not all suppliers are equal
Trust(another company with your financial process)
Privacy issues
Hidden costs
Control(SOW agreements)
Marketing Information