Case Study Harvey Industries
Case Study: Harvey Industries
Harvey Industries has been affected by the economy and in recent years the company has had a loss in profits causing financial distress. The company specializes in high-pressure washer system assembly, as well as, the sell of system repair parts. The systems are used in high-pressure cleaning of cars, engines, swimming pools, planes, barns and more. Harvey Industries is primarily assembles self-service car wash systems equipment. Three out of the last four years the company has lost money, the sales loss for the last year was $1,238,674 and an increase in inventory levels of $124,324. Currently the staff consists of 23 employees including key members of the president, sales manager, manufacturing manager, controller and purchasing manager. The recent death of the owner, a new president was appointed by the trustee, who has discovered issues with inventory control. As a consultant, the recommendations to adjust the inventory control system for both supply chain management and inventory management to operate an effective inventory tracking system and to develop inventory velocity to move material through the supply chain.
Inventory is defined in the text book as a stock or store of goods (Stevenson, 2011). As a vital part of a business, inventory is crucial for company operations and plays a role in customer satisfaction. Stevenson shares the functions of inventory to include meeting customer demand, to ease production requirements, to decouple operations, to protect against stockouts, take advantage of order cycles, to hedge against price increases, to permit operations and to take advantage of quantity discounts (2011). When there is inadequate control of inventories, it can result in under or over stocking products. Not having enough inventory may lead to loss sales and dissatisfied customers and overstocking can hold up money that could be spent in other areas of the company. The main concerns with inventory
Harvey Industries has been affected by the economy and in recent years the company has had a loss in profits causing financial distress. The company specializes in high-pressure washer system assembly, as well as, the sell of system repair parts. The systems are used in high-pressure cleaning of cars, engines, swimming pools, planes, barns and more. Harvey Industries is primarily assembles self-service car wash systems equipment. Three out of the last four years the company has lost money, the sales loss for the last year was $1,238,674 and an increase in inventory levels of $124,324. Currently the staff consists of 23 employees including key members of the president, sales manager, manufacturing manager, controller and purchasing manager. The recent death of the owner, a new president was appointed by the trustee, who has discovered issues with inventory control. As a consultant, the recommendations to adjust the inventory control system for both supply chain management and inventory management to operate an effective inventory tracking system and to develop inventory velocity to move material through the supply chain.
Inventory is defined in the text book as a stock or store of goods (Stevenson, 2011). As a vital part of a business, inventory is crucial for company operations and plays a role in customer satisfaction. Stevenson shares the functions of inventory to include meeting customer demand, to ease production requirements, to decouple operations, to protect against stockouts, take advantage of order cycles, to hedge against price increases, to permit operations and to take advantage of quantity discounts (2011). When there is inadequate control of inventories, it can result in under or over stocking products. Not having enough inventory may lead to loss sales and dissatisfied customers and overstocking can hold up money that could be spent in other areas of the company. The main concerns with inventory
References: Stevenson, W.J. (2011). Operations Management (11th ed). New York, NY: McGraw Hill/Irwin. Vermorel, J. (2012). Stock Replenishment definition. Retrieved from website on December 10, 2012: http://www.lokad.com/stock-replenishment-definition.ashx