Assignment:
Managing Inventory
Instructions: The world of supply chain management benefits directly from using the creative and the critical side of your brain. Nowhere is this more evident than in the management of inventory. It should come as no surprise that many creative ways exist to address the value, velocity, and volume of inventory across a supply chain. But, at some point creative thinking must give way to critical thinking as these ideas undergo a thorough analysis. Based on the information shared within the chapter which do you think would be most creative for your organization if they were a global company? Explain your reasoning for selecting this model.
Instructions: Your initial post should be at least 250 words. Please post more than 2 reply responses of 100 or more words to your classmates or the instructor. Responses should be a minimum of 100 words and include direct questions.
The most creative way to improve the value, velocity and volume of inventory would have to be Economic Order Quantity. In my job we ship and receive aircraft parts. The amount of the items required in a location is based on what is required to do the mission at that location. If there are to many items in a location, then we are wasting money on assets that sit for long periods of time without being used, and some items could even expire while sitting in stock. Also, if there are not enough items in stock then expressed purchases must be made, which can be very expensive.
The EOQ is a well-established way of managing inventory. It determines the quantity to have in stock that reflects the lowest cost of ordering and holding items. While EOQ can be very helpful on how many items to keep on hand and how to lower cost, it cannot determine when items should be ordered or determine changes in supply and demand. However, you can recalculate numbers based on these changes. To help with determine re-orders, you would need to use the Re-order Point Systems guideline.
When determining cost, you must look at how many items you are required to order each year. Lets say you require 6,000 items per year and order 300 every month. You would track your cost at your maximum number (300) and then when you reach zero and divide by two. This number you receive will be your average inventory quantity. This is something that anyone managing a warehouse could use to improve the value, velocity, and volume of their inventory.
Trent, R.J. (2016). Supply chain financial management: Best practices, tools, and applications for improved performance. J.Ross Publishing
This was very interesting to me as there is always so much you can do with inventory. The chapter in the book talked about the below topics when dealing with managing inventory:
1. Managing Cost Adders
2. Cost of Forgoing a trade discount
3. Calculating Work-in-process
4. Strategic Profit Model Scenario
5. Economic Order Quantity Modeling
6. Reorder Point Systems
7. Cash Conversion System
In my opinion I am in the middle between two of these topics. The first would be managing cost adders, and the second would be reorder point systems. I think both would work very well in a global company. The reason I picked managing cost adders is because when manufacturing and shipping products there is usually a lot of overhead costs associated with producing and moving product. I think by managing cost adders you can lessen the effect of some of these costs.
For example, when shipping to Europe from the United States may products travel by road then by ocean and back to road. When importing into Europe you are subject to VAT Taxes. I think that by managing cost adders you can mark the product up to take care of some of the production, transportation and import taxes.
For the second one it is the reorder point systems I think this is very important because it will let you know in general how much of a product a customer is consuming daily. This helps plan for production and having a safety stock helps protect the company from having to do a lot of expedites that can be very costly.
Trent, Robert J. (2016). Supply chain financial management: best practices, tools, and applications for improved performance.
Global Supply Chain Management and the Supply Chain Manager:
Instructions
Internet Field Trip (complete) conduct (take) a personal "internet field trip" ...... post your findings as it relates to Global Supply Chain Management and the Supply Chain Manager. (Find any recent web article (no older than two/three years from today) and relate your findings on how the Supply Chain Manager is making a difference in today's global markets). Recommend you use the key word(s) "Supply Chain Management "or "Supply Management" in your search ..... ensure you properly cite your website (source) at the bottom of your post.......... Have fun this week because the world wide web is your research lab.
Instructions: Your initial post should be at least 250 words. Please post more than 2 reply responses of 100 or more words to your classmates or the instructor. Responses should be a minimum of 100 words and include direct questions.
This forum had me really excited to explore the internet field trip in researching ways the Supply Chain Manager is making a difference in today's global markets. Author Martin Christopher in Logistics and Supply Chain Management has received recognition internationally and has been awarded multiple times for his achievements and advisories in the Supply Chain Industry. Martin Christopher explains initially how logistics and supply chain began, which was due to war.
Getting supplies and equipment to personnel is a high priority and essential to win a war. Only until World War II did they finally understand the importance of logistics and supply. Today's logistics and supply chain industry now understand the value and importance on time delivery to it's customers. Searching for continuous process improvements/strategies are key to a successful supply chain management.
Some new rules Martin Christopher mentions is a company is not as successful standing alone, and having a strong brand backed up with huge advertising (Christopher, 2016). He discusses managing and focusing on core processes for constant changing environment in the supply chain industry is important so companies are flexible to changes and are able to still be successful.
As a supply chain manager understanding the different impacts, challenges, and forecasting can cause a companies demand can shift will allow the company to prevent/prepare uncertainties with no delays in goals. One thing I've learned in this class and on the job is creating a cooperative relationship with vendors/buyers/customers etc are important as well. At the end of the day customers look for low cost, great quality goods and services. Providing this at the moment they demand this can be the downfall or success of a business.
Reference:
Christopher, M. (2016). Logistics & supply chain management (5th ed.). Harlow: Pearson.
Supply chain management as a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, to minimize system-wide costs while satisfying service level requirements. Effective supply chain management (SCM) has become a potentially valuable way of securing competitive advantage and improving organizational performance since competition is no longer between organizations, but among supply chains.
This research conceptualizes and develops five dimensions of SCM practice (strategic supplier partnership, customer relationship, level of information sharing, quality of information sharing, and postponement) and tests the relationships between SCM practices, competitive advantage, and organizational performance. The supply chain is the network of organizations that are involved, through upstream and downstream linkages in the different processes that produce value in the form of products and services in the hands of the ultimate consumer.
According to one article I read, it is difficult for supply chain professionals to comprehend, but most of their colleagues couldn't care less about fill rates or asset utilization. For that reason, supply chain management in most companies is considered to be everything - except sexy. Supply chain managers who outline their must-win battles regularly point to initiatives like forecast improvement, master data standardization, ERP implementations, or warehouse optimization. These battles are clearly crucial for boosting supply chain performance but, at the same time, they're a hard sell to senior management.
References
K. Hoberg, K. Alicke, and M. Leopoldsede, (2016). Time to Get Supply Chain Management to the Board.
Christopher, M. (2016). Logistics & supply chain management. Pearson UK.