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Theory of Inventory Management
Theory of Inventory Management
Theory of Inventory Management
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Overview Scope of the Project Riordan Manufacturing can continue to expand by reducing the inventory cost of raw materials and finished goods. Riordan currently has a legacy MRP Information System (IS) in place, and this project provides an excellent opportunity to upgrade the infrastructure to allow for a more cost-efficient way to track inventory. Goals of the Project Riordan would like to develop or acquire an MRP system that will track and manage raw materials and finished product inventory across all plants to help ensure reduced inventory costs throughout the entire company. Business Objectives The exploratory committee has identified the following as the Business Objectives for this project: Accurately track and manage raw materials and finished goods Reduce inventory cost of raw materials and finished goods Improve MRP infrastructure Measures of Success The following tasks will be performed to measure the success of the project at six (6) months and one (1) year: An inventory analysis validating the accuracy of tracked inventory A cost analysis comparing the cost of inventory management to previous reports Hire an IS analysis firm to analyze the new Riordan MRP system's efficiency Statement of Scope, Objectives, and Constraints Current Needs Riordan Manufacturing needs to reduce the inventory cost of raw materials and finished goods. To reduce these costs, Riordan would like to develop or acquire an MRP system that can accurately track and manage raw materials and finished product inventory across all plants. Objective I am investigating the feasibility of developing or acquiring an MRP/MRPII information system to ensure that Riordan can accurately track and manage raw materials and ... ... middle of paper ... ...w for better tracking of goods, which prevents lost materials. This, in turn, will allow Riordan to reduce the cost of inventory and allow us to gain sales with lower customer prices. The third objective is to improve the MRP infrastructure. Removing the legacy equipment and slow data lines will allow much more inventory to be processed. This will increase productivity throughout all of the plants. Conclusion Riordan Manufacturing will more than recover the expenditures of this IT project within two years of the upgrade. Riordan will experience an increase in sales and a decrease in inventory loss due to accurate and low-cost inventory management. On-going costs will be minimized with an internal IT department handling support and maintenance of the new system. All of the project's objectives have been met, and Riordan's expectations have been fulfilled.
In today’s operational management arena, there are certain expectations from a managerial aspect that must be met in order to be successful. A comprehensive look at the Space Age Furniture Company will show exactly what the Materials Requirement Planning (MRP) calculations are for this company at present time and then take the information given in order to properly suggest ways to improve the sub-assemblies. In addition, there will be an analysis on the trade-offs between the overtime and inventory costs. A calculation will be made on the new MRP that will improve the base MRP. This paper will also compare and contrast the types of production processing to include the job shop, batch, repetitive, or continuous, and determine which the primary mode of operation should be and exactly why. A detailed description on how management can keep track of the job status and location during production will also be addressed. Finally, there will be a recommendation on they type of changes that need to occur that will be beneficial to the company and at the same time add value to the customer. This paper will conclude with summary of the major points.
In this report I will discuss different solutions for PVMS to help them improve network communications between the stores and head office, and centralize procedures for recording stock. This report will list the advantage and the disadvantage of each one.
Some of the bottleneck foremen come up with methods of streamlining their processes to increase throughput at their stations. And for a time, things seem to be improving and inventories are slowly shrinking and more backlog orders are being filled. Then Stacey reveals a proble...
Multigroup utilizes Infor’s ERP system “ Visual manufacturing”. They have been utilizing the same system since 2007 and they are not planning to change it in the near future. Before 2007 Multigroup had a xxxxx ERP system. Infor, the software company, is the fourth biggest ERP developer with 6% of the market. (Tied with Sage). The ERP Visual manufacturing “Metal fabrication” is design to satisfied the necessities of the steel industry by incorporating : Customer management, Sales and order management, Mixed mode manufacturing, Planning and scheduling, Supply chain management, Quality management, Asset management, Product lifecycle management, Financial management, Business intelligence, Performance management, Human capital management
The entire chain of McDonalds delivers on such tight lead time with such high quality products by successfully integrating IT capabilities throughout the chain. Suppliers are using SAP while Distribution Centers manage through RAMCO Marshall ERP with Cobra software. These systems not only assist in day to day functions of the store like tracking sales, but also enable restaurants to schedule staff and send forecast orders to DCs.
The development (or iteration) of the new system was approved due to successful budgetary results over the previous two years and growth trends expected over the next two years. Additionally, ongoing maintenance on the system as problems began to arise was beginning to negatively influence production performance, and a need to iterate the system to incorporate evolving production goals was identified. The successful budget of the previous years encouraged the approval of replacing the current conversion system with a successor that promises to increase production performance while lowering the fixed costs of salaried programmers needed to maintain it.
SchmidtCo, was a family owned, Philadelphia based firm in the business of import and distribution of Automobile replacement parts. It had Annual turn-over of $40Million. It distributed 10,000 SKU of different items having 20 million pieces of shipment in a year. The company had 90 employees distributed in three warehouses. The volume and complexity of its operation made its information system backbone of the operation. SchmidtCo had decided to replace its 18 year old information system infrastructure with state-of-art one. But its project to convert the information system of his auto parts distribution business is in real
The first stage of the implementation process is the coding phase. Before this process begins, it’s crucial that all of the key features are taken into consideration by the stakeholders to assure appropriate functionality of the new system for Riordan. Each module developed for the new system directly impacts the functionality for the
Wheeled Coach is the world’s largest ambulance manufacturer. With multiple different products and around 3000 different raw materials there is huge potential for operating failures. In 1994 Wheeled Coach implemented a new MRP system called MAPICS. They hoped that by doing this that they would gain better control of their excess inventory that was becoming overwhelming.
Within the manufacturing sector, supply chain management is important since it involves many movements of goods, raw materials and finished goods. It is therefore important to maintain this free flow of goods with in the manufacturing industries to ensure that all goods are delivered on a timely manner (Ross, 2010). In manufacturing, there is need for inward movement & storage of raw materials, inventory for the work-in-progress, and finished goods movements. Further, finished goods that have been supplied can also be returned to ...
A manager’s ability to regulate a company’s inventory system is very important to an organization. The Space Age Furniture Company utilizes Materials Requirement Planning as an effective means of improving processes amongst the company. If the company continues to utilize MRP systems, there will be much success in transforming the company’s operational intricacies.
In an era when the cost of the added value increasingly important percentage of the cost of raw materials, to increase efficiency and profitability it is not enough to buy at the lowest price, but it is absolutely necessary to optimize all processes corporate organization, and this can only be achieved by introducing Computing software that eliminates waste and errors.
It is undeniable that Inventory Management is an important key to success at Walmart. This paper will discuss the two main methods of Inventory Management used by Wal-Mart: Material Requirements Planning and Just-in Time. Next we write about the technical means of keeping track of inventories, like RFID tags. We conclude by discussing how Wal-Mart, one of the world’s largest retailers, manages its inventories. Material Requirements Planning (MRP) Walmart needs to make sure that consumers are satisfied all the time, not only with the quality of service being provided to them, but with the quality of the product they are planning.
Materials Requirement Planning (MRP) is one of the integral production control techniques used in Enterprise resource planning(ERP). It calculates the net requirements for materials based on its dependence on other materials and develop procurement proposals which are often in the form of purchase requisitions and planned orders. The MRP creates planned orders for all finished and semi-finished products and aims to make sure that the company has sufficient availability of material to meet its requirements. In ERP, the Master Data is a key factor in the successful implementation of the production process. It sorts and stores data automatically, based on their functions and distinctive characteristics. The Material Master Data is the most commonly used type of Master data in business organizations. It contains all the essential information required to manage materials, the production of these materials, as well as their delivery information.
Simplify the building block Inventory to make complex products more manufacturable and more manageable and profitable.