Inventory Management

Topics: Inventory, Supply chain management, Supply chain Pages: 4 (1048 words) Published: November 4, 2009
Case Study Related to Advising Action Steps for Better Inventory Management

A leading consumer products company dealing in cosmetics and other personal care products was seeking ways to: _ Reduce inventory levels across their forward supply chain
_ Improve Inventory Record Accuracy at their storage points
_ Accurately track damaged goods at various points in the supply chain The above problems together were a significant burden to the company. Implementation of best practices after a detailed business analysis resulted in the following benefits: _ Inventory Record Accuracy improved to 95% within 2 months

_ Stock levels reduced by about 30% across stocking points in the supply chain _ Complete visibility was achieved in the supply chain with respect to damaged goods inventory

Organisation Background:
The firm was a leading consumer products company dealing in cosmetics and personal care products with its head office located overseas. The company had a supply chain network of 3 factories with bonded stock rooms (BSR) attached for dispatch to the depots and 35 depots for servicing distributors. Goods move from the factory to the BSR. BSR dispatches stocks to Mother CFAs (depot). Other depots receive stocks from the Mother depot and sell them to distributors. Key Concerns for the Company:

1. To reduce inventory level at the BSR and depots.
2. To improve inventory accuracy at stocking points including both BSRs and depots 3. To identify the damaged stocks across the chain and initiate action in a timely manner A study was completed focusing on the

1. Inventory-related issues at BSRs and depots. These included: _ Inventory holding as a proportion of sales
_ Practices employed for track goods in the warehouse
_ Proportion of fast and slow moving stocks to the total inventory _ Linkages of factory dispatches to BSR with patterns of BSR dispatches to depots _ Accuracy of inventory records especially of fast selling lines 2. Demand Planning process. The...
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