Operational management of inventory

OPERATION MANAGEMENT

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Contents
OPERATION MANAGEMENT.....................................................................................................1
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Types of inventories...............................................................................................................3
Analyze how goods and service design concepts are integrated............................................4
Role of inventory....................................................................................................................4
Four different types of layouts...............................................................................................5
Two metrics to evaluate supply chain performance...............................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Inventory management is defined as systematic approach to selling, sourcing and storing
inventory in form of raw materials as well as finished products (Axsäter, 2015). The given
organisation is based on two different manufacturing companies named as General Motors (GM)
and Ford Motors situated at United States founded in 1908 and 1903 respectively. Both deals in
manufacturing of automobiles, commercial vehicles, automobile parts, luxury vehicles. The main
aim of report is to discuss about types of inventories which is used by companies, way of goods
and services design concept along with role of inventory. It also highlights about kinds of layouts
their importance and supply chain management as well as way to improve inventory
management.
MAIN BODY
Types of inventories
The different types of inventories which both companies have to manage along with their
characteristics are described below:
In context of General Motors, types of inventory include productive materials, supplies,
work in progress and finished products. Here, productive materials such as steel, copper,
aluminium, lead, platinum, resins. The respective organisation does not carry excess inventory of
raw materials for their production. These inventories help in manufacturing of final products and
service. Similarly, on other hand, finished products are composed of service or vehicle parts like
cars, vehicles and so on. The finished part is regarded as largest component of inventory that
makes half of total inventory. GM makes balance among both raw materials and finished
products (Balcik, Bozkir & Kundakcioglu, 2016)
In addition to this, Ford Motor also has to manage different inventory such as raw
materials, work in progress, supplies and finished goods. It is also manufacturing company
which produced automobiles, luxury vehicles, pickup trucks, SUVs, commercial vehicles and so
on. The respective organisation has to manage raw materials such as aluminium, steel, leads and
moves towards work in progress stage where they have to process all these materials and convert
into finished goods and products (Bushue & et. al., 2015). For example, car manufactured by
Ford organisation has to collect material first then process them through different stages and
finally car is manufactured.