Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
Inventory management is an ongoing process (as opposed to a project which has a beginning and an end) of monitoring the constant flow of stock keeping units (SKUs) into and out of supply. The goal is to prevent the inventory from becoming too high (cost), or so low that the operations of the company are in jeopardy (service levels.) (Barcodes, 2011)
Elemental management of inventory requires balancing the three key aspects of stock control: lead time, buffer stock and record keeping.
Lead Time
An inventory manager needs to know how long it takes for a vendor to process an order and make a delivery of goods. he/she also needs to understand how long it will take for those materials to transfer out of inventory in the normal course of business flow. With these two time frames determined, the manager can calculate when to place an order and how many units to order to keep production running smoothly. (Barcodes, 2011)
Buffer Stock
Buffer stock is the maintenance of a few additional units above the minimum number required for normal production flow. This cushion serves to minimize the probability of interrupted production due to a lack of essential parts at various stages of production. Maintaining buffer stock for raw materials, work in progress, and finished goods inventory helps keep the production lines flowing. (Barcodes, 2011)
Record Keeping
A well-run manufacturing enterprise will keep accurate records of inventory at all stages of production for control and tax reporting purposes. From an operational standpoint, the most important of these is the accurate maintenance of the finished goods inventory which facilitates informing sales personnel of available merchandise ready to ship to customers. On a basic level, this requires posting the production of newly completed goods to the inventory totals as well as subtracting the most recent shipments of finished goods to buyers. From these basic concepts, the inventory management craft has developed into a highly complex process. (Barcodes, 2011)
Recent Developments
Two recent trends in advanced inventory management are "demand planning" and "inventory optimization." Both of these techniques require sophisticated software and careful implementation to achieve the desired results. Practitioners are attempting to get as close as possible to the mythical "just in time" for the work-in-process...
"This type of software can provide a quick return on investment by helping to reduce inventories and manufacturing costs." (Essex, 2009)
Demand Planning
Other analysts take an opposite view believing that inventory optimization can only advance the ball so far and propose that further gains in inventory management will require a comprehensive demand planning strategy. In that regard, the latest thinking is shifting away from planning based on historical sales and shipment data and toward real-time analysis and visibility which is called "demand sensing." (Essex, 2009)
The latest trend is to capture on-going demand at the point-of-sale. Companies that have tried to sense changing levels of demand using order or shipment data have realized superior results by examining POS data on a frequent basis, most often weekly. Other software vendors have concentrated on introducing demand planning modules for analyzing special situations, such as product promotions and new product launches. (Essex, 2009)
Essex's research leads him to consider that the next step is to bring everything under the purview of a sales and operations planning (S&OP) framework. S&OP extends the reach of demand planning and analysis to include inventory as well as the supply chain personnel that handle it. But basic S&OP ought to be the first step, experts say, because the technology won't work well unless underlying business processes are brought under control. "A lot of the benefit that an S&OP process provides is having some kind of discipline in your work process. That discipline needs to exist before you put in a software product that's designed to optimize it." (Essex, 2009)
S&OP is nothing new; it was in vogue in the late 1970s. "All these things that are old are becoming new again." Another "old friend" that is making the rounds is vendor managed inventory (VMI.) In the VMI process, the vendor assumes responsibility for managing the replenishment of stock…
References
Barcodes, Inc. (2011), "What is Inventory Management?" retrieved April 20, 2011 from http://www.barcodesinc.com/articles/what-is-inventory-management.htm
Cornacchia, Eugenio, (February, 2004), The CBS International Business Network Tools Group, "Recent Trends in Inventory Optimization," retrieved April 20, 2011 from http://www.bnet.com
Essex, David (November 17, 2009), Search Manufacturing ERP, "Inventory Management Trends Focus on Improved Forecasting," retrieved April 20, 2011 from http://searchmanufacturingerp.techtarget.com
Business -- Inventory Management Both Hewlett-Packard, Inc. and Dell, Inc. manufacture electronics, managing inventories of purchased parts, fabricated assemblies and finished goods. Manufacturers such as HP, Inc. and Dell, Inc. must work effectively with their "Capacity Management" and in doing so, have arrived at four main layouts. In addition, supply chain is measured by various metrics, to improve overall performance and profitability. While Dell currently outperforms Hewlett-Packard in inventory management, there
Request for Proposal (RFP) � Inventory Control SystemTABLE OF CONTENTS1. INSTRUCTIONS TO BIDDERS ��..�������������������� 31.1 General Description of Work ��������������������.. 31.2 What Must Be Included with Bid ������������������� 31.3 Schedule of Bid Period Activities ������������������.. 41.4 Location of Work �������������������������.. 41.5 Pre-Bid Meeting �������������������������� 51.6 Owner Contact for Questions ��������������������. 51.7 Pre-Award Surveys ������������������������.. 51.8 Sealed Bid Requirements ���������������������... 61.9 Basis for Bid Evaluation ����������������������.. 61.10 Ethical Standards ������������������������.. 71.11
Costco Programs, Budgets and Procedures Costco's approach to financial improvement will come in the form of a two-pronged strategy. The first is to increase inventory turnover, and the second will come in the form of increasing market share. Inventory turnover is a standard ratio that refers to "how many times a company's inventory is sold and replaced over a period of time," ("Inventory Turnover," (n.d.). Increasing market share usually depends on a
AMR Research (2005) believes that companies must begin developing and redeploying current order management architectures with the focus on delivering more flexibility rather than a strategy that delivers far less. The move toward customer-driven fulfillment processes requires the ability to build and adapt channel-specific, product-specific, and customer-specific order flows quickly without an army of developers creating custom code. However, the days of big bang, rip-and-replace implementations are over, and any
Managing Change Final Change is an ongoing process that is inevitable; organizations no longer have an option to avoid change, and therefore they have to change in order to survive and avoid being obsolete. It is quite a challenging thing for an organization to change, let alone a single individual. This places huge and increased pressure on the management of an organization to discern and manage the important details of change.
Management Wal-Mart's challenges in the Global market Wal-Mart as the world's leading retailer has been spreading very fast extending its power across the world market. This began with the nine countries in South America, Asia, and Europe. This expansion is likely to extend even in the near future. As the company attempts at penetrating the hypermarket culture in different countries, it has encountered a battery of severe problems in the process of