Inventory Management Systems – Summary
January 17, 2011
Erica Woods, Professor
The following will discuss a collaborative effort in preparation for subsequent assignments regarding Quantitative Reasoning for Business at the University of Phoenix online learning environment. Team C will evaluate the inventory system of various organizations. The systems will be described and comparisons describing advantages and disadvantages of each system will be discussed.
Inventory management systems help managers efficiently manage the flow of materials, effectively utilize people and equipment, coordinate the internal activities of an organization and communicate with others. While useful and crucial to an organization, inventory management neither makes decisions nor manage operations or individuals rather, it provides the necessary information to managers who in turn, make more accurate and timely decisions to manage operations. Team C has collected inventory data of Apple Computers, Ford Motor Corporation, Hewlett Packard, Corporation, PepsiCo, Toyota Motor Corporation and Daimler Trucks North America. Team C participants will describe the inventory data of the aforementioned organizations and discuss the advantages and disadvantages of same.
Inventory Management Systems Description
Ford Motor Corporation
Hewlett Packard Corporation
Hewlett-Packard (NYSE:HPQ) is a global leader in the IT industry. Servicing over 160 countries, HP’s product line combines a myriad of hardware, software and services--offering one of the tech. world’s most comprehensive manufacturing portfolios. Its products and services include, PCs, servers, printers, networking equipment, enterprise IT and information management, business intelligence, application development and management, consulting systems integration and other technology services. Inventory related to product demand, component cost, and availability uncertainties can have a significant impact on a manufacturing company's revenue and profits. Thus, properly managed supply chains provide substantial benefits to organizations, allowing the utilization of resources to increase significantly while reducing the cost of many time consuming steps in the operation’s life cycle. Following is a description of the inventory system of Hewlett-Packard as well as a comparison of the advantages and disadvantages of its system. “The Procurement Risk Management (PRM) Group at Hewlett-Packard (HP) developed and implemented a mathematical model, business process, and software to measure and manage supply chain risks on the procurement side.” (Interfaces, 2008) Technologist and member of HP PRM Group, Venu Nagali, Phd. reports the objectives of PRM at HP in a Stanford Risk Management Roundtable. In his report, Nagali stresses the importance of measuring and managing procurement uncertainties such as cost, demand and availability. To increase earnings and cost predictability, Nagali suggests protecting the product margin against volatile component prices. He addressed demand uncertainty with cost saving portfolios such as lower material and inventory cost and responds to uncertain availability with assurance of supply by protecting against shortage risk. Additionally, Nagali lists the components of PRM framework: (1) measure risk through forecast scenarios for product demand, component cost and availability (2) manage risk through a portfolio of structured contracts for different segments of demand and (3) PRM process through periodic reassessment of risks and managing same. (Nagali, 2006)...
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