Inventory Optimization and Management

The assignment content discusses the importance of inventory optimization and management in supply chain management. It highlights the need for effective inventory management to reduce time periods between product manufacturing and market introduction, improve quality management, and optimize inventory levels. The content also emphasizes the importance of forecasting, using FIFO (first in, first out) approach, and categorizing inventory into raw materials, partially manufactured products, and finished products to manage changes in inventory.

Inventory Optimization and Management

Table of Contents
INTRODUCTION...........................................................................................................................1
PERFORMANCE OBJECTIVE of INVENTORY MANAGEMENT...........................................1
MANAGING CHANGES IN INVENTORY..................................................................................2
OWN CRITICAL THINKING........................................................................................................2
CONCLUSION................................................................................................................................2
REFERENCE..................................................................................................................................3

INTRODUCTION
Inventory management is a process of keenly looking after the sheet of the inventory and
stock items. It is one of the most important components of the supply chain management. Supply
chain management is the process of doing the tasks in an proper sequential order and execute the
set of activities. Starting form collecting the raw materials to delivering the finished goods, all
the protocols of supply chain re followed. And for the success of every company, a well defined
supply chain management is mandatory to be followed. Inventory management also follows the
approaches of the supply chain management and hence makes everything organized. Though,
inventory management is a complex process for a large ad huge organization but the basics are
same irrespective of the size or the type of the company.
When this is seen with respect to huge organizations with large area, in small companies
we easily directly put the items in the stock without any difficult. But if we are talking about the
business company who is a wholesale distributor, goods are not raw materials rather they are
finished materials. This way the finished goods are made from the raw goods and each and every
details is feeded into the inventory. And hence the inventory should always be kept in sync with
the items kept in stock.
PERFORMANCE OBJECTIVE AND HOW TO MEASURE THIS
Honestly speaking,with the advent of the inventory management it has been observed
improvement in the performance in terms of operations that are daily carried out in the company.
To be more specific it reduces the time period between manufacturing of the product and market
introduction. These all involve improvement processes throughout the supply chain management
life cycle. This further helps in improving the overall management of the quality . if any item
gets missed in the inventory then it is very difficult to get it back on same page.
Categorizing the inventory into separate sections show that there exists various kinds of
inventory that affects the performance of the functionality of the company. And these factors
which are determinant of performance are raw materials, partially manufactured products, and
finished products.
MANAGING CHANGES IN Inventory Management
When you have successfully implemented a supply chain management tool that is inventory
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management, then you have to manage it properly and there are some points to be kept in mind.
It is important to forecast the inventory first. It is based on the patterns in history or the past
figures. Next, you can use FIFO (first in, first out) approach . this is in the case of items such as
fruits, flowers that perishable as they can wilt soon and cause loss to the company. Hence those
flowers or fruits brought first should be sold first to avoid the wilting.
OWN CRITICAL THINKING
By going through the concept of what is explained above I firmly believe that inventory
management is an effective approach. This will not only help in doing the work I an organized
way but also make the management more productive. Thus, it is through this way only industries
can maintain the satisfaction of employees which is usually affected when a firm does not meet
their demand on time.
CONCLUSION
It can be stated that for better inventory management, knowledge about different types of supply
chain strategy is necessary. It is also important to have knowledge of managing strategies to
manage the inventories according to the the products or items it is managing. in the case of items
such as fruits, flowers that perishable as they can wilt soon and cause loss to the company. Hence
those flowers or fruits brought first should be sold first to avoid the wilting. While this is not the
case of non - perishable items and other managerial strategies can be applied on those. Having an
inventory in an organization of utmost importance.
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REFERENCES:
Silver, E. A., Pyke, D. F., & Peterson, R. (1998). Inventory management and production planning and
scheduling (Vol. 3, p. 30). New York: Wiley.
Cachon, G. P., & Fisher, M. (2000). Supply chain inventory management and the value of shared
information. Management science, 46(8), 1032-1048.
Buurman, J. (2002). Supply chain logistics management. McGraw-Hill.
Hua, G., Cheng, T. C. E., & Wang, S. (2011). Managing carbon footprints in inventory
management. International Journal of Production Economics, 132(2), 178-185.
Grzegorz, M. (2008). Value-based inventory management. Romanian Journal of Economic Forecasting, 9(1),
82-90.
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