The decrease in profits is due to poor inventory control and lack of effectiveness in the manufacturing process. Besides, Riordan has a goal of reaching a $50 million revenue mark in the next two years it will take the best and most up-to-date software available to ensure the inventory is properly kept and improve the manufacturing process.
Improving the manufacturing process can enhance product quality, reduce manufacturing costs, and increase efficiency. The best way to improve the manufacturing process is to automate the inventory system. Currently, the system in place is as follows. Firstly, the raw materials are removed out of inventory. The manufacturing staff then completes an inventory worksheet that indicates the type of materials removed from the inventory and informs the inventory clerk, who enters the information into the inventory system. Next, the manufacturing process begins. The manufacturing team completes the form throughout the manufacturing process. Lastly, when the finished goods have been completed, the inventory clerk is given the inventory for the final product and enters it into the system. (Riordan Manufacturing, Virtual Organization, 2004)
A more accurate and efficient way to input inventory is to install a computer at each station