Inventory Management Essay

Companies must predict which crossroads clients will purchase along with determining what amount of money of graves will be purchased. The social club will in tour produce exuberant produces to get through the forecast demand and sell, or coerce, the goods to the consumer. Advantages The company is fairly assured it will have enough product on hand to complete guest orders. This prevents the inability to meet customer demand for the product. Dis services If too much product is left in memorial, it increases the companys bells for storing these goods. An mannequin of a push system is Materials Requirements Planning, or MRP.MRP combines the calculations for financial, operations and logistics planning. It is a computer-based information system which contains scheduling and ordering. Its purpose is to firebrand sure raw goods and materials needed for production atomic number 18 available when they are needed. Pull System The pull stock list control system begins with a customers order. With this strategy, companies except make enough products to fulfil customers orders. Advantages There will be no excess of inventory that involve to be stored, thus reducing inventory levels and the cost of carrying and storing goods.Disadvantages It is exceedingly possible to run into ordering dilemmas, such as a supplier not being able to get a shipment step to the fore on clock. This leaves the company unable to fulfil the order and contributes to customer dissatisfaction. An example of a pull inventory control system is the just-in-time, or JIT system. The remainder is to persist inventory levels to a minimum by only having enough inventory, not more or less, to meet customer demand. The JIT system eliminates drift by reducing the amount of storage lacuna needed for inventory and the costs of storing goods. Push-Pull SystemSome companies have come up with a strategy they call the push-pull inventory control system, which combines the best of both the push and pull strategies. Push-pull is also known as lean inventory strategy. It demands a more accurate forecast of sales and adjusts inventory levels based upon true sale of goods. The goal is stabilization of the supply chain and the decrement of product shortages which can ca single-valued function customers to go elsewhere to make their purchases. With the push-pull inventory control system, planners use sophisticated systems to develop guidelines for addressing short and long-term production needs . List atleast eight performance measures for storage warehouse steering A warehouse is a commercial building for storage of goods. A warehouse solicitude system, or WMS, is a key part of the supply chain and to begin with aims to control the movement and storage of materials within a warehouse and mould the associated transactions. The following activities are common in any warehouse a)Receiving b) Put-away c) pronounce selection d) Storage e) ecstasy The eight perfor mance measures for warehouse management are 1.Service Level Shipment Service Level (% of Lines shipped on time) Service Level (% of inbound lines put away within time limit) 2. Space % of space occupied vs. % accessibility warehouse capacity use rate % = No. of palets stored in warehouse / warehouse capacity in palets no. 3. roll Inventory period of playover ratio Inventory verity 4. Productivity Productivity (Measured in terms of lines picked per instant worked) Number of SKUs picked per hour 5. Quality Quality in terms of errors per thousand lines shipped. Errors in dispatchesWare housing discrepancies = Products lost value (at cost) / total products shipped value (at cost) 6. embody Cost of warehouse operations Storage cost per concomitant Cost of picking per order Cost of shipping per order 7. Cycle prison term Time taken to process a receipt. Time taken for each put-away. Inventory days on hand. Order Pick cycle time per order. Shipping time 8. enjoyment Receiving Do ck door utilization % Utilization % of roil and equipment % Location and cube occupied Picking labour and equipment utilization % Utilization of shipping docks in % . What features would make an ideal supplier? Timely actors line A good supplier is mortal who keeps up to timely livery of goods and supplies. Delayed supplies leads to business losses to the immediate customer and in turn delayed delivery to the end customer. This also opens up avenues for other second-string systems like buffer inventories to keep the chain going in add-on to increasing overall costs. Competitive price Business owners and suppliers add the cost of purchasing materials for a product into its retail price making it costlier.A reduction in this cost will lead to a reduction in the cost of the product as well. Quality Quality is a very important aspect in determining a good supplier. Providing ultimate customer value is an important objective of business. Minimal account work From the placing of an order to the actual buying of an order involves a short ton of paper work. A good supplier will find ways of reducing the amount of paper work involved. Quick response/ turn around time The world of business is highly unstable, and often the banquet between demand and supply can be hard to predict.A good supplier will always be prepared to meet such a contingency. Again a frequent and smaller quantity of supplies is the key to eliminating this gap. Inspection of goods Inspection of goods is a time consuming action for both the supplier and the buyer. However quality assurance of the goods can again reduce the time spent on inspecting the goods. Taking care of brook and tear and transport molest Transportation and delivery often involves a lot of wear and tear and a good supplier is someone who recognizes these limitations and takes proactive steps to help reduce or avoid the damage involved.Constant frequency of delivery If a supplier can keep to supplying goods at constant an d smaller frequencies, thence the cost advantage is supplemented. Meaning, if a product or part is found to be defective, then the time spent in replacing it is minimal as remote to having to replace a whole carton or shipment of that item since the delivery is frequent and the supply chain is actively functioning. This is not only cost effective but is also a time and space saver.