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Inventory management in supply chain research paper
Review of literature on inventory management
Review of literature on inventory management
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Sunil Chopra and Peter Mendl argue that inventory is one of the drivers of the supply chain performance and that it has a great impact as the other drivers, such as facilities and transportation which are the same as inventory being ‘Logistical Drivers’. Analyzing the position of inventory in the supply chain, certain factors of the inventory will be taken into account such as the responsiveness, economies of scale, the different variations of inventory, how other factors will affect the inventory, and transportation, which as stated before it is one of the drivers in the supply chain, Vs. inventory. All these concepts of inventory will be analyzed in the supermarkets domain and how crucial is inventory for the supply chain performance.
Inventory
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Raw materials are inventory items, which are going to be used by the manufacturer in the work process to create components, or for finished goods. These inventory items may be goods or obtained materials that the organisation has produced or extracted. These items may have also been purchased from outside of the company. Generally, these types of items are chemicals, paper, wood, paint, steel, food items etc. Work in process (WIP) includes all the components, assemblies and materials that are being processed or which are waiting to be processed. This inventory contains all materials, including raw materials which are going to be processed into a finished good which awaits approval. A finished good is a finalized product which is ready to be sold to customers. Consequently, a finished good inventory is a stock of finalized products. As mentioned before, these products have been through an inspection after the work in process and after approval, have been transferred to the FGs inventory. After this step, the finished goods can then be sold to wholesalers, retailers or directly to the customers. In the supermarket supply chain, all of the supermarkets such as Asda, Tesco, Waitrose etc. all have inventories mostly of finished goods, as they do not only sell the products of other manufacturers, but they
Sainsbury‘s had been managing distribution in the same way for more than 40 years, which is mainframe-based warehouse management system, Its typical distribution center was almost as old. Compared to the age of the average Tesco depot—seven years—Sainsbury's depots were nearing the end of their useful life. The old system of depots was designed for the purposes, such as packing for meat and own-brand goods. However, it means that one store could be receiving goods from five or six different depots in any one day, which was highly inefficient.
...n Empirical Comparison of Anticipatory and Response Based Supply chain Strategies.” The International Journal of Logistics Management. 9: 2; 21-33. Lair, Noor Ajian Mohd, Awaluddin Mohamed Shaharoun and Mohamed Shariff Nabi Baksh, “JIT Implementation across A Supply Chain and It effects on Inventory Distribution”, http://www.moste.gov.my/kstas/NSFWorkshop/NSF/nsf%5CAAI16.DOC Lenzini, Joshua M (2002) “The Army's answer to supply chain management Army Logistician”; Fort Lee; Sep/Oct 2002 Li, Yuan, Fan, Zhiping and Zhao, Xuan (1999). “An Integrated Framework of Supply chain Management System.” Software Engineering Conference 1999. Proceeding sixth Asia Pacific. 196 – 199 Pagh, Janus D and Martha C Cooper (1998) “Supply chain postponement and speculation strategies: How to choose the right strategy”, Journal of Business Logistics, Issue # 2, Volume 19, Pg. 13-33.
In the retail stores, managers are complaining of frequent stock outs even though the DC is full of merchandise, which is not moving enough through the supplier, DC, and retail stores. The inventory issue also ties in with transportation problems where accurate lead and delivery times are non-existent. The inventory turnover is not at its full potential because if the DC has merchandise yet the stores are stocked out, the inventory is frozen and will become obsolete.
This behavior of first manufacturing and then supplying to market cannot expect the sale effect before consumer purchase. In this “Push System”, the risks of inadequate inventory or excess inventory as well as the poor sales are existing side by side. Thus, the supply chain should adopt the “Pull System” which regards customer as center and market demand as the driving force.
After the purchasing on materials is made, then it turns to operation part which is transforming the raw material into finished food and services.
Suppliers: Since the raw material’s are commodities there should be no problems on this front this is not any different
Increasing customer expectations and fluctuations in demand are driving companies search for alternative strategies to operate their supply chains to make more profit now and in the future. Goldratt 's distribution replenishment model is one of such strategies that is being extensively implemented nowadays and gaining popularity throughout world (Belvedere & Grando, 2005). The model is called Theory of Constraints Supply Chain Replenishment System : TOC - SCRS. This is a replenishment method of the TOC Supply Chain Solution (Cole & Jacob, 2002; Goldratt, 1994). In this paper, I would like to give an example of a bakery and dairy products company that manufactures and distributes throughout a supply chain network consisting of Plant, Central
...d on delivery and refer any problems back to the supplier. The materials must be purchased at a competitive price. Today many production processes are automated. This means that machines or robots do all the routine or dangerous jobs. Operators check that the productions like is functioning correctly by checking consoles and computer screens.
Coyle, J., Langley, C., Gibson, B., Novack, R. and Bardi, E. (2008).Supply Chain Management: A Logistics Perspective. 8th ed. Cengage Learning, p.366.
Inventory management is a method through, which a business handles tangible resources and materials to ensure availability of resources for use. It is a collection of interdisciplinary processes including a full circle from the demand forecasting, supply chain management, inventory control and reverse logistics. Inventory management is the optimization of inventories of manufactured goods, work in progress, and raw materials. According to Doucette (2001) inventory management can be challenging at times; however, the need for effective inventory management is largely seeing more as a necessity than a mere trend when customer satisfaction and service have become a prime reason for a business to stand apart from its competition. For example, Wal-Mart’s inventory management is one of the biggest contributors to the success of the company;
Primary production of homogenous goods and several processes are undertaken for the finished product to be realized is what is called process costing. All stages of processing and costs accrued during manufacturing of a product will be added to the final batch of products. Keenness is
There are two main phases that are important in the movement of materials: material management and physical distribution. Materials management is the timely movement of raw materials, parts, and supplies. The physical distribution is the movement of the firm’s finished products to the customers. Both phases involve every stage of the process including storage. The ultimate goal of logistics is to coordinate all efforts of the company to maintain a cost effective flow of goods.
At each stage of production the products are checked to ensure that they are at a
The key performance drivers of Supply Chain Management (SCM) are - facility effectiveness, inventory effectiveness, transportation effectiveness, information effectiveness, sourcing effectiveness, pricing effectiveness, delivery effectiveness, quality effectiveness and service effectiveness. These drivers include various performance markers that may be measured quantitatively by gathering information and applying them in SPSS. The works here may principally be quantitative with spellbinding measurable investigation. In the current world, practical supply chain management to help the triple primary concern, (nature, domain, and economy) is likewise included in the extent of supply chain performance drivers. This is relatively a quite new research region.
Supply chain would not be efficient and receptive if inventory wasn't been able properly. Inventory management is definitely a way of carrying materials from raw components to the final customer, thus managing the movements and flow throughout the supply chain. Without inventory managing, supply chain movement would certainly not in existent. Every method must be managed in line with the fulfillment in the ultimate priority that is the fact that consumer pleasure. Supply chain carries investment to fulfill uncertainties and mismatch regarding demand and supply. Smart management of the supply chain is gained by integrating the strategies business processes of the partners within a supply chain in order to make certain the flow and storage can be coordinated as this can be completed within the functional area of products on hand management as well. In summarize, effective supply chain supervision is performed by having a good inventory management. The two ought to end up being coordinated with each various other especially in monitoring the flow of inventory within just the supply chain. Any mistakes with the inventory guidelines would consistently influence the supply chain that's why investment management and supply chain administration processes should be included that may result to the success of a company if enforced successfully and effectively. Also, it's significant that managers should consider to take actions in lowering the quantity of inventory required in purchase to decrease cost expected thus raise the responsiveness in the supply chain. If inventory can be managed successfully then presently there would most likely a good management of supply chain as well. They're connected with each other with one another and if one of these doesn't fit with the other, after that it'd certainly lead to the