Poor Inventory Management

Topics: Manufacturing, Inventory, Supply chain management Pages: 1 (261 words) Published: May 17, 2012
Poor Inventory Management
Problem:
This company faces problem in their inventory management system. This is due to the overloaded of the inventory in their storage. The excess inventory store in the warehouse will increase the maintenance cost and the risk of being stolen or damage. Bad inventory management system also will reduce the company’s profit and whittle away the company’s market share. Suggested solution to overcome the Inventory Management problem : To solve the problem of overload, Isella Sofa Design Sdn Bhd can use Just In Time (JIT) method. Just In Time (JIT) is a production and inventory control system in which materials are purchased and units are produced only as needed to meet actual customer demand. When the company use Just in Time (JIT) manufacturing and inventory control system, they purchase materials and produce units only as needed to meet actual customers demand. In Just In Time manufacturing system inventories are reduced to the minimum and in some cases are zero. If Isella Sofa Design Sdn Bhd operating at JIT manufacturing system, the company would purchase only enough materials each day to meet that day needs. Moreover, the company would have no goods still in process at the end of the day, and all goods completed during the day would have been shipped immediately to customers. As this sequence suggests, "just-in-time" means that raw materials are received just in time to go into production, manufacturing parts are completed just in time to be assembled into products, and products are completed just in time to be shipped to customers.
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