Inventory and Distribution Management

This document discusses the importance of inventory and distribution management in improving order fulfillment and overall organizational performance. It explores the evaluation of current performance, reasons for inefficiency in order cycles, and strategies for improvement. The document also includes references for further reading.

Running head: INVENTORY AND DISTRIBUTION MANAGEMENT
Inventory and Distribution Management
Name of the Student:
Name of the University:
Authors Note:

1
INVENTORY AND DISTRIBUTION MANAGEMENT
Contents
Part 2:...............................................................................................................................................2
Answer 1:.....................................................................................................................................2
Answer 2:.....................................................................................................................................2
Answer 3:.....................................................................................................................................4
References:......................................................................................................................................6

2
INVENTORY AND DISTRIBUTION MANAGEMENT
Part 2:
Answer 1:
The approach of David in evaluating the existing (as-is) and the desirable (to-be) states of
DWC’s order was quite effective. David understanding the importance of evaluation of current
scenario to improve it in the future to achieve desirable order cycle in the future used the
following standard procedure.
I. Evaluation of current performance of order cycle of the organization.
II. Analyzing the current performance of the organization against its rivals.
III. Determining desired performance level for the company to achieve its objectives.
IV. Documenting the standard order cycle.
V. Building a team to work in the direction of achieving the standard order cycle to
reach the desired performance for the company.
A well designed order cycle should be able to deliver the products and services to the customers
as and when required by the customer without any difficulty. A world class order fulfilment
system will contribute to the achievement of organizational objectives effectively. It shall be
capable of providing the customers with products and services as and when necessary to the
customers. The gap between order and supply of products in a well-designed system is minimum
(Sachar & Kaur, 2017).
Answer 2:
The success of an entity in the competitive business world to a large extent is depending on the
ability of the entity to use its resources efficiently and manage its operations effectively. Having
an efficient order cycle is extremely important to fulfill order commitments properly. It is clear

3
INVENTORY AND DISTRIBUTION MANAGEMENT
from the facts that DWC does not have a world class order cycle, in fact the order cycles of the
company is quite inefficient and ineffective. The reasons for inefficiency and unreliability of
order cycles and other process are explained below.
Inability to understand the requirements of the customers:
The lack of ability or inability of the management to assess the customer preferences and tastes is
one of the main reasons for the inefficient order cycle within the organization. The management
that understands the tastes and preferences of its customers will be better equipped to fulfil the
customer orders effectively.
Inefficient inventory management:
Inventory management is directly related with the customer preference and choices. An entity
will struggle to manage its inventory properly if it does not have proper understanding about the
expected demand of different products in the market. Inefficient inventory management is a huge
detriment to the world class order fulfillment system for any organization (Yao, Dresner & Zhu,
2010).
Wrong calculation of economic quantity of order (EOQ):
An organization needs to correctly calculate the economic order quantity to minimize the
inventory cost. In case wrong calculation of EOQ the efficiency of the company in managing the
order cycles effectively is also wrongly hampered (Ishfaq & Raja, 2017).
Lack of speed:

4
INVENTORY AND DISTRIBUTION MANAGEMENT
Lack of speed in converting the inventory into sales is another major reason resulting in
inefficient and ineffective order cycle within an organization. It is important to have an effective
strategy in place within the organization to increase the speed of converting inventory into sales.
The above factors have contributed to the inability of the organization in maintaining a world
class order fulfillment system. This has further dented the performance of the company as it has
failed to provide the customers with top quality products and services in a timely manner. Thus,
it is important to have a world class order fulfillment system to improve the overall performance
of an organization.
Answer 3:
In order to improve the performance of DWC, David and team must reimage the order
fulfillment system capabilities of the company. In order to improve the order fulfilment
capabilities of the company it is extremely important to have a proper understanding about the
demand and supply in the market of different products. Only when there is a clear understanding
of demand and supply in the market that it would be possible for the management to store
necessary items to meet the requirements of the customers. The reduction in lead time shall be
possible only when there is available inventory to meet the demand of the customers. If the
inventory does not have the required materials and products which are in demand then acquiring
the same and then supplying the same to the customers will increase the time gap between order
and supply. Hence, inventory management plays a crucial role in the overall order fulfillment
system within an organization including that in DWC (Gao, Shen & Cheng, 2010).
Once David and his team are able to reimage the order fulfillments capabilities of the company
the following tradeoffs can be expected.

5
INVENTORY AND DISTRIBUTION MANAGEMENT
I. Reduction of time gap between order and supply of products to minimum. This will
improve the performance of the company drastically as the customers will be able
receive goods as per their orders on time.
II. The company will be able to achieve higher sales in the future subsequent to the
improvement of order fulfillment capabilities.
III. Reducing the cost of inventory management with proper EOQ order placement.
IV. The financial performance of the company shall improve significantly as the overall
sales will increase significantly.
V. Increase amount of goodwill shall be generated as the company will be able to meet
the demand of the customers on time without any delay.
VI. Reduction in cost of operations shall be helpful to the overall organizational objective
of the company.
VII. Better management of inventory will improve the overall operational efficiency of the
company.

6
INVENTORY AND DISTRIBUTION MANAGEMENT
References:
Gao, C., Shen, H., & Cheng, T. (2010). Order-fulfillment performance analysis of an assemble-
to-order system with unreliable machines. International Journal Of Production
Economics, 126(2), 341-349. doi: 10.1016/j.ijpe.2010.04.014
Ishfaq, R., & Raja, U. (2017). Evaluation of Order Fulfillment Options in Retail Supply
Chains. Decision Sciences, 49(3), 487-521. doi: 10.1111/deci.12277
Sachar, D., & Kaur, H. (2017). Impact of Digitalization in an Organization and its importance in
Knowledge and Value Management System. Asian Journal Of Management, 8(1), 37. doi:
10.5958/2321-5763.2017.00007.5
Yao, Y., Dresner, M., & Zhu, K. (2010). Searching for the ‘Monday Blues’ in Order Fulfillment
and its Cure. SSRN Electronic Journal, 1(2), 18-22. doi: 10.2139/ssrn.1535117