Supply Chain Management: The Background Of Inventory Management

Inventory management is the management of materials in the form of parts or stock in any form internal of the plant and the stability to the external of the demand which is about the flow of materials. Contemporary manufacturing models require high productivity and the ability of companies to respond to the unstable market environment. There are most of the industries in high competition leads to a way to advance the manufacturing process and to build their own inventory management layout accordingly. It is very crucial to the layout such an inventory structure that they accommodate to variation in demand, exclusively when companies consider with multiple goods. Inventory management initial from the acquisition of raw materials manufactured

In the lead of companies progressively believe that supply chain excellence is not only to reduce the cost of the source, on the contrary, this is a source of competitive advantage which is possible to improve performance of the customer service profit, asset utilization rate and reduce costs. An effective combination of each entity and chain entity which is necessary to make individual and collective accomplish of this objective (R.P. Kampstra, 2006). Below of the figure 1 will show the main entity of supply chain (Salcedo,

Supply chain management covers all the movement and store the raw materials, finished goods from the original point to the point of consumption and work-in-process. In order to compete become a successful in recent market, corporate need to have an impressive and efficient of the supply chain network. The supply chain network has become the key to the success of the corporate due to globalisation and the expansion of multinational corporations. The change of technology brings about the low cost of information flow, which increases the coordination between information flow and supply chain network members (UK Essays, 2015).

Essentially, the world is a large supply chain. The main problem involved in supply chain management which including the fast growth of multinational organisations and partnership in the strategic alliance ways; world enlargement and procurement; variation in the price of natural gas and environmental issues, these issues have the symbolic impact on organisation strategy and the bottom line. The reason for these rising direction, supply chain management is the most important commercial guideline in the global today (University of San Francisco,