Inventory in manufacturing or production unit has both advantages and disadvantages for different departments. While Inventory has been shown as a burden on OPEX due to maintenance cost by some, some attribute virtues to Inventory as it offers better customer service by variety of choices, availability and low handling cost etc. While the excess or shortage of Inventory has definitely negative impact on business, a proper management of it can help in operational efficiency and better customer service
59.Managing Inventory – Part 1
Inventory is an idle resource which has some economic value. It could be waiting for future transformation or sale. It is considered as current asset in balance sheet. Out of typical manufacturing wastes, Inventory is one of the important ones. Inventory can cover all inefficiencies in the system and is one of the key areas to improve operational efficiency. One of the focuses of lean management is to reduce the inventory for operational issues to get exposed. The focus of this article is to look at pros and cons of having inventory, challenges of inventory management, conflicts to be managed and various ways to control inventory.
What is Inventory Management?
Inventory is a necessary evil. Ideally zero inventory is the best. But this will lead to increase of lead time which in turn will affect the customer service. So, some inventory is required. Question is how much? Inventory Management is about managing the level by considering cost of holding the inventory and customer service. It is a trade-off and both these requirements should be balanced.
Conflicting views on Inventory
There are conflicting views on the need of Inventory. One argues on why is it required where others take a stand on why is it not required.
Let us look at both the arguments.
Why Inventory is required?
A, It will improve customer service. Customer can be responded with a very short notice and Customer has the choice when many varieties are kept as Inventory
B, Ordering costs can be reduced in purchase as frequent buying will increase the administrative cost. Buying in bulk will reduce this
C, Business loss because of stock-out situation can be avoided
This story is from the December 2016 edition of industrial business MART.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the December 2016 edition of industrial business MART.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Rewrite Your Story
“She is free in her wildness; she is a wanderess, a drop of free water. She knows nothing of borders and cares nothing for rules or customs. ‘Time’ for her isn’t something to fight against. Her life flows clean, with passion, like fresh water.” – Roman Payne
CSR for Women Empowerment
Multitasking is the middle name of women and donning multiple roles comes naturally to them. Women with their spirit, strength and sensitivity are undoubtedly the backbone of any society. The competence shown in discharging their duties, care and compassion displayed in taking care of the family are the two sides of the same precious coin ‘ the woman’.
Visionary Budget, Vibrant Manufacturing!
The clarion of ‘Make in India’ laid the foundation for growth in Manufacturing. The sector has witnessed increased inflow of FDI since then; the sector is expecting more conducive tax structure and ‘Ease of Doing Business’ with the roll out of GST soon. Meanwhile, as a catalyst, the Union Budget 2017 has features in store for the manufacturing sector to provide it right impetus for continuous growth.
Government Initiatives for Better India
THOUGHTFUL, is one word which can be used to describe budget 2017. Aftermath of demonetization and subsequent cash crunch in the system lead to slow down in the economy, manufacturing sector also slowed down, quarterly result of companies were affected (with few exceptions). Finance Minister has tried to curb demonetization effect in this budget.
Electric Revolution: JBM Solaris Ecolife 9m
Electric Buses have overcome the ‘under development’ phase and have hit the market for practical use. Joining the diverse fleet of buses on road is the Ecolife 9 Electric bus by JBM, with promising features and a futuristic approach. Proclaimed to be emission-free and handy to the user, the bus guarantees a low operation cost.
Managing Inventory for Better Operational Efficiency
Inventory in manufacturing or production unit has both advantages and disadvantages for different departments. While Inventory has been shown as a burden on OPEX due to maintenance cost by some, some attribute virtues to Inventory as it offers better customer service by variety of choices, availability and low handling cost etc. While the excess or shortage of Inventory has definitely negative impact on business, a proper management of it can help in operational efficiency and better customer service
Patience & Passion Equals SWAYAM
How often does it happen that people hold on to their dreams till they have achieved it, enduring all the ups and downs? Well, here is a story of patience and passion that inspires us on many levels. One project, eight years and participation of more than 250 students! SWAYAM has earned it all and so have the minds behind it.
Go Green
Environment depletion has been a serious concern for the world since past many years. In response to that, many organisations have taken several initiatives with the intension to deter the further damage to the environment. In our CSR column, we present to you the initiatives taken by Bill Forge and Tesco in the field.
Success: It Needs You
Road to success has never been so easy. One is bound to encounter ups and downs in this journey. Hard work, consistency, discipline are some of the factors that need to be practiced religiously in order to achieve success.
Go Green
Environment depletion has been a serious concern for the world since past many years. In response to that, many organisations have taken several initiatives with the intension to deter the further damage to the environment. In our CSR column, we present to you the initiatives taken by Bill Forge and Tesco in the field.
