Riordan Manufacturing - Essay Example

Running Head Riordan Manufacturing Riordan Manufacturing Riordan Manufacturing, a leading plastics manufacturer, employs 550 people and received annual earnings of about $46 million. For a company of this type, computer systems utilization is a core of successful market performance and business operations. Innovative information technologies and computer system help a company to improve its supply chain and production facilities, introduce effective strategic planning and communication between employees and with suppliers. For Riordan Manufacturing, computer applications will deal with such problems as the number of distribution centers to establish, where to locate them, the customers to service from specific warehouses, the quantities to ship to warehouses from each factory, and the amount of inventory to carry at each distribution point. Many studies using computers to determine costs and allocation of physical distribution resources have proven highly beneficial. Through use of computers, both linear programming and simulation techniques have been applied to physical distribution as a means of reaching the most practical decisions possible. Computers play a useful role in automating data processing (Mintzberg et al 2004). By furnishing more adequate, up-to-date information, and by permitting manipulations and analyses previously considered impracticable or impossible, they facilitate the development of a system of marketing intelligence and logical marketing decisions. Riordan Manufacturing managers will be able to foment a decision-making and information revolution. Through their use, routine decisions may become programmed (Dobson and Starkey 2004). Also, computers have extended mathematical models and techniques to a broader range of marketing problems and replaced intuitive and judgmental decisions with more scientific and objective decision making. Businessmen thus far have not learned to use computers effectively in problem solving and decision making. Considerable study and thought is needed to harness them for efficient use. Decision making under conditions of complete certainty and complete uncertainty form the anchor points of the decision spectrum. Marketing decisions are usually made under conditions of risk (Mintzberg et al 2004). Several useful decision criteria, are noted, including expected value, minimax, optimistic, and regret. The role of models, particularly quantitative models, in reaching marketing decisions is discussed. Both of the basic model building processes-model building by abstraction and by realization -- are analyzed (Dobson and Starkey 2004; Riordan Manufacturing 2008). Computer system utilization will help production managers to improve quality control and improve production capacity management. Current manufacturing inventory management software used by Riordan management to “monitor and manage the inventory at all stages of the manufacturing process. This software manages processes such as order placement, tracking usage in every phase of production, regular monitoring of stock levels and restructure the stock decimated” (Riordan Manufacturing 2008). Improve control and quality control systems will help the company to reduce number of defective items and decrease spending on raw materials. These money can be spend on future modernization and technological innovations (Dobson and Starkey 2004). Modern supply chain depends upon and is based on computer coordination and information technologies. It adopts a systems orientation to plant location, transportation, warehousing, inventory, and movement and handling activities. These activities are designed as a coordinated system and linked with the other elements of the marketing mix. Thus, physical distribution has brought a change in concept (Mintzberg et al 2004). The gap between traffic and marketing thinking is painfully evident in many companies distribution methods; little has been done to relate transportation methods and service to the objectives of the distribution system in support of marketing efforts. Too often, physical-distribution activities are performed as a number of independent functions rather than as a system. To plan, direct, and coordinate physical distribution activities, it is desirable to group them all within a single department. This is usually achieved in retailing and wholesaling under the operations department. Manufacturing, however, generally lacks such coordination. Physical distribution as a concept sees the physical movement of goods as a set of related activities carried on by a number of firms at various levels, linked together to form a total distribution system. Computers are useful in physical distribution. They help in balancing inventories with needs, forecasting sales, determining the best locations, allocating inventories among warehouses, and directing shipments and production. Decisions concerning the level of executive responsibility of the physical-distribution officers, the activities to be grouped within the department, and the functional area to which the physical-distribution department is attached, vary for similar businesses (Dobson and Starkey 2004). In strategic planning and communication, information, particularly feedback, is a significant part of any marketing-control system, for the quality and quantity of knowledge available are fundamental to control performance. Feedback presents a way of shaping marketing by taking into account the results of past performance and learning from it the actions to take in the future. Computers have brought a sharper focus to marketing control. They have made forecasts more realistic, permitted companies to control the activities of far-flung geographic complexes, and furnished detailed information about products, territories, customers, and personnel within the required time (Gardiner, 2005). They have made it feasible to conduct marketing audits, to be discussed shortly. Computer-information banks supply the grist for effective control systems. By collecting daily sales reports, processing orders, updating inventories, and handling shipping directives, computers make it possible to exercise meaningful control over marketing activities (Dobson and Starkey 2004). Marketing control is now in a transitory state; better standards and more sensitive marketing barometers are being established (Gardiner, 2005). The internal control system controls company resources to design the marketing mix in response to opportunities. It involves appraisal, evaluation, and adjustment. Appraisal refers to the monitoring information and preliminary assessment phase of marketing activities, which notes current situations. Evaluation of the current situation, the goals and targets, and the deployment of resources enables review of the marketing programs effectiveness (Gardiner, 2005). This leads to the adjustments that may be made, if necessary, in either the sales or profit targets, the marketing mix, or both. For example, intelligence is gathered about profits and is evaluated and reviewed by product, territory, salesmen, and product line. The situation is then audited and changes may be made. In this manner, market position is assessed on the basis of market share, competition, opinions and reactions of customers, and degree of customer satisfaction. Marketing operations are rated in terms of such activities as inventory levels, credit, accounts receivable, and working capital (Gardiner, 2005). Business requirements for systems upgrades include logistical decisions and the design of a companys movement-and-storage system result from cost-market requirement analysis of alternatives. It involves a balancing of transfer costs, operating costs, and marketing factors. Transportation is the connecting link among plants and warehouses and markets. Product characteristics affect physical-distribution activities. If the markets for products are highly competitive, then physical-distribution demands are great because of product substitution (Gardiner, 2005).These questions suggest that physical distribution is involved in longrange planning. The location of distribution facilities is a capital-budgeting problem. Manufacturing, production, packaging, information, costs, and competition are also affected by physical-distribution decisions. Modern analytical tools, new technology (especially data processing), and handling and moving equipment increase services and lower costs. The integration of vehicles resulting in the design of two-level and three-level railroad cars to transport autos, the development of containerization and special loading and unloading terminals, the use of highway transport for local pick up and delivery, and air transportation to eliminate warehouses, are examples (Gardiner, 2005). Linear programming, simulations, and waiting-line theory can be used by Riordan to solve current problems. For instance, linear programming can be used to minimize costs of shipments and to locate warehousing facilities. Such mechanization may lead to reduction of the number of warehouses, the development of total movement and storage systems, and the evolution of new forms of storage and transportation (Dobson and Starkey 2004). Often improvements in physical distribution help to reduce certain costs and make it possible to cultivate broader markets (Mintzberg et al 2004). In the light of the findings, management may decide to make some adjustments. It is here that control in the narrow and restricted sense of power to adjust actually occurs. Two basic aspects may be controlled: (1) the criteria used for measurement and (2) the marketing mix. Improvements in the financial performance have led to increased marketing effectiveness and reduced costs for some industries. Not all business segments are uniformly affected (Riordan Manufacturing 2008). Companies operating under two or more of the following conditions are most likely to benefit from a logical organization of logistical activities: Broad distribution of bulky products. Branch warehouses. Competitive customer-service locations. Substantial freight costs. Substantial intracompany transfers. Substantial investments in warehousing space and finished goods (Dobson and Starkey 2004). The use of computers to develop marketing information systems, simulations of the marketing mix, models of promotional allocations, or simulations of markets are examples. It focuses on developing large-scale integrated management information control and decision systems. The attempts by some companies to create large-scale simulations that embody all aspects of the business are movements in this direction (Riordan Manufacturing 2008). In sum, information systems and computer upgrades improve financial position of Riordan Manufacturing and its relations with suppliers and customers. Computer and innovative technologies are linking suppliers to customers, giving salesmen, buyers, advertising managers, and retailers new roles. They are initiating new decision systems. To utilize computers most effectively, management must consider the interaction of computers with marketing environments and human beings. Eventually, marketing systems may be redesigned so that computers can be built into the total system. References 1. Dobson, P., Starkey, K. (2004). The Strategic Management: Issues and Cases. Blackwell Publishing. 2. Drejer, A. (2002). Strategic Management and Core Competencies: Theory and Application. Quorum Books. 3. Gardiner, P. (2005). Project Management: A Strategic Planning Approach. Palgrave Macmillan. 4. Mintzberg, H., Lampel, J. B., Quinn, J. B., Ghoshal, S. (2004). The Strategy Process. Pearson Education. 5. Riordan Manufacturing. (2008). Retrieved 01 June 2008 from http://riordan-manufacturing.blogspot.com/ Read More