Riordan Manufacturing Research Paper

1. Introduction

This paper is dedicated to description of Riordan Manufacturing and here I will present company’s mission, description of business and production, finance and accounting overview, human resources, legal information, sales and marketing description as well as operation and summarize what company already has and what it needs for business. Riordan Manufacturing is the manufacturer of plastic. It employs about 550 people. Riordan Industries is an owner of this company.

The company was started by Dr. Riordan, who is a chemistry professor and who derived several patents about polymers into high tensile strength plastic substrates procession. The company was started in 1991. From the very beginning the company was mainly concentrated upon the research, development and licensing of related to plastic issues. And in 1992 Dr. Riordan got the venture capital that was used for plant purchase. One year later, the company already started plastic beverage containers production with the purchase of manufacturing plant in Albany. In 2000 operations were opened in China, and it was a great expansion event for the company. And the entire fan manufacturing operation moved there.

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Riordan Manufacturing specializes on the beverage containers production with the location of its plant sin Albany, Georgia; it also produces plastic parts in Pontiac, Michigan and plastic fan parts in China, Hangzhou. A corporate head quarter is situated in San Jose and research and development is done there. Major customers of Riordan Manufacturing include manufacturers of automotive parts, aircraft manufacturers as well as beverage makers and bottlers, the Department of Defense and appliance manufacturers.

2. Company’s mission

Mission of Riordan Manufacturing regards its focus, relationships with customers, employees and its future. Riordan Manufacturing focus is the following: Six Sigma, leading edge R&D and exceeding ISO 9000 standards define the attitude and abilities of Riordan Manufacturing. We are industry leaders in using polymer materials to provide solutions to our customers’ challenges.

Our R&D is, and will remain, the industry leader in identifying industry trends.1 Riordan Manufacturing describes its relationships with customers in the following way: We will strive to be a solution provider for our customers and not be a part of our customers’ challenges. Long-term relationships will be sought by maintaining rigorous quality controls, innovative solutions, a responsive business attitude and reasonable pricing.

And with employees: We will maintain an innovative and team oriented working environment.

By assuring that our employees are well informed and properly supported, we will provide a climate focused on the long term viability of our company.

Riordan Manufacturing future plans: We must be focused in achieving and maintaining reasonable profitability to assure that the financial and human capital is available for sustained growth.

3. Description of business. Finance and Accounting issues.

The company has three operating plants in California, Michigan and Georgia and also a joint venture in the People’s Republic in China. Operating plants have their own Finance and Accounting Systems and on the defined periodic basis they provide information that is consolidated in the main office in San Jose. Each separate System has the following components that are reported: general ledger, accounts payable and accounts receivable, order entry, procurement, sales and purchasing history, invoicing and shipping, payroll, financial reporting and operating entity in San Jose includes EDI, Bar Code Reading and Executive Decision Support System. Important thing about Systems is that they should be compatible in order be easiy consolidated and reported.

After surface analysis the Income Statement and the Balance Sheet it becomes obvious that the company is doing rather well as there is an increase of accounts receivable in 2005, even though there was a drastic decline in 2004. There is an increase in sales. Increase in expenses for quality assurance, research and development expenses is a sign that a company takes care of its business. But in 2005 Income statement shows the decrease of Net Income after Taxed paid even though the increase in sales was reported. Probably it was connected with the increase of operating expenses and cost of goods sold. Speaking about the Financial Reporting System of the Riordan Manufacturing, the detailed examination for the further successful operation is essential. Therefore it was made a research and it was found out that state- of- the- art system will be a solution for the problem as well as introduction of internal policy changes and additional training to the employees.

4. Human Resources

In this section of the paper I will discuss key figures in the company, annual pay adjustments, compensation philosophy and reward practices, employee and labor relations, employee recognition programs, global operation, key jobs and pay grades and also recruitment and selection practices and training and development programs.

President and Chief Executive Officer of Riordan Manufacturing is Dr. Michael Riordan. Reporting to him Executive Assistant is Jane McCail, SVP and R&D is Kenneth Collins and Chief Operating Officer is Hugh McCauley.

Annual pay adjustments are held on a fiscal year basis. HR managers evaluate each employee with the use of behaviorally-anchored scale with the possible rating of- “does not meet expectations”, “meets expectations” or “exceeds expectations”. As to the compensation philosophy and reward practices, the goal of the Riordan Manufacturing pay program is no assist the company to achieve its missions and objectives by means of attracting of new employees, motivating existent and retaining of highly qualified professionals. Riordan Manufacturing is focused upon creation of the team oriented environment, people who work to achieve common goals and that are interested in getting best results, and therefore variable payment is the tool of stimulation and motivation of the working staff. Stock options are available only for the officers of the corporation.

Rewarding system is very much flexible and can be easily adjusted to the performance of the individuals, taking into consideration their specific skills and contributions to the performance of the company.

Riordan manufacturing offers following social security items and workers’ compensation: health, dental and life insurance for employees and their dependants, flexible working schedules in case they are approved by managers, 401 (k) saving program with a company match, paid holidays, paid vacation and financial assistance in education.

Relations with employees are totally controlled and supervised by Human Resource department and main policies include: The company has an “open-door” policy, where employees are encouraged to share any concerns with higher-level supervisors if they are not satisfied with a supervisor’s decision. The process is loosely defined, and employees do not have a formal process for appealing supervisory decisions.

There is an employee handbook given to employees on their first day of employment. Employee policies, such as attendance, etc. are explained in the handbook. Employees are encouraged to read and understand the handbook.

Safety technicians are in place to encourage safe and healthy work practices.

Employee recognition programs include Outstanding Employee Award, Employee suggestion Program and Seniority Awards. Outstanding Employee Award program presumes that there can be one employee per year to be called the outstanding one. Employees are nominated by their colleagues and the specially created committee selects the winner using following criteria: level of performance, level of teamwork and support, respect for diversity. Employee Suggestion Program presumes that employees can make any suggestion regarding activities of the company and working process in general. In case is the suggestion is adopted, employees that contributed receive a $25 check and a picture in the newspaper of the company. Seniority Awards refers to the awards that are given to employees upon the basis of the years of their employment. If it is 1 year- 1 day of with pay, fifth year- solver company logo lapel pin, tenth year- gold logo, 20th- golden watch and acceptance to the “20-year club” with annual gala dinner.

As company owns 60% of the joint venture in china where plastic fan parts are produced, there is a product manager from US to handle the process. He is compensated in accordance with method of his home country. His pay level is the same to the managers in Albany and Pontiac. There are specific allowances for him which contain following issues: he gets foreign service premium that counts 25% of the base salary, he has one visit per year to US with all his family and it is not counted as regular vacation, he has relocation benefits, receives educational assistance for his two children who are students and get tuition, housing allowances and cost of living adjustment based on international survey data. Riordan Manufacturing involves balance sheet approach when calculating benefits. Engineers can also travel to China for particular projects.

Key jobs in Riordan Manufacturing include R&D and engineering positions that are essential to business operations. Cam support specialists are important as well, as most of the products of the company are made by NC machinery.

There are seven basic pay grades in Riordan Manufacturing: Executive band (all Officers, Vice Presidents and Directors, exempt status, 21 persons), Manager (all positions with supervisory responsibilities, exempt status, 25 persons), Professional (no supervisory responsibilities, exempt status, 76 persons), Sales 1 (sale representatives, exempt status, 12 persons), Technicians (nonexempt status, 23 persons), Administration (nonexempt status, 21 persons), Production (nonexempt status, 127 persons). Employees in China have country-based pay system.

For Recruitment, Riordan Manufacturing uses following resources: online advertisements at Monster.com, local newspaper advertisements, employee referrals, use of employees from temporary agencies, attendance at engineering conferences. During the selection process HR department uses following tools: applications, review of CVs, personal interviews with HR recruiters and with hiring managers.

Trainings are usually proposed on mandatory basis to new employees. Supervisors are also to attend particular workshops to take definite positions during 12 months.

HR department uses HRIS system that was installed in 1992 and which is the part of the financial system package.

5. Sales and Marketing

Riordan manufacturing uses CRM system to customer information and to deliver more value. Information that is stored in the system includes: historical sales, files of past marketing research, marketing plans and design awards, sales database, production records, profit and loss statements by item and group and marketing budget.

There also marketing communication activities that include sales force promotions, price and volume discounts to large customer, public relations, brand development, tradeshows and events, customer user group underwriting, etc. There also exists Sales Plan for the future year that assists sale organizations in prioritizing activities and distributing properly resources to meet expectations. This plan consists of the following parts: strategic sales objectives with corresponding financial goals and roll-out schedules (contain section of increased sales to existing customers and expanded sales to new customers), tactics by marketing mix, timing and relationship to strategic sales objectives (contain description of 4 Ps of marketing0 product, place, price and promotion) and customer relationship management strategies.

6. Legal issues

Legal matters of the company are overseen by Chief legal Counsel, including patent applications. Litteral & Finkel law firm is involved with litigation, tax and real estate matters.

7. Operations

As it was already mentioned there are 4 basic operating units in the Company – manufacturing in China, Albany, Pontiac and R&D.

China plant produces electric fan products.

The buyers also purchase the Plant’s requirements for plastic polymers locally. The polymers, after being received, are melted at precisely controlled temperatures and injected into individual molds to create individual plastic parts required by the fans. This is accomplished by means of injection molding machines located in the production area. These capital expensive machines control the molding processes to the specifications of the plastic parts being produced, such as the fan blades and fan housings. The plastic fan blades, plastic fan housings, electric motors and other miscellaneous parts are then assembled to create finished models of electric fans. The assembled fans are individually packaged together with instructions on how to use the product and stored in a finished goods stockroom awaiting sale.

Plastic bottles are produced in Albany. Even though the plant usually has orders for bottles production, it has a safety stock of popular containers for some emergency cases. There is also a safely stock for raw materials. All products are shipped in time as customer satisfaction is a key concern. Riordan Manufacturing uses the Huffman Trucking Company to ship all of its products in the United States. Rates for shipping a full truckload of cargo to a single destination are lower than shipping partial loads.

Plastic is produces at MI facility in Pontiac, which include part design and the color of the parts.

The Research and Development Department consists of personnel of product development. Their job is to research and develop the next generation of heart valves, medical stents, and complementary medical devices. Since new product development efforts require only a small amount of raw materials and components to build proof-of-concept models or initial working models of potentially new products, their material and component requirements can be described as very minimal.

8. Conclusion

In the conclusion I would like to summarize that after though examination of all spheres of Riordan Manufacturing business it becomes obvious that it is well structured and organized. All departments perform their duties and tend to improve their performance on the constant basis. Probably they need involve more IT business solutions for their financial reporting system, but it general I consider this company to have everything for successful operating at the market.

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