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A review of Inventory Management Issues in Large Scale Food Canning

1. 0 INTRODUCTION

Background of the Study

In this review the researcher is looking to proffer means to fix issues in inventory management in the creation sector through the use of Supply String Management process, Inventory management ideas. The specific emphasis of this analysis will be on the inventory management issues in the canned food industry including the production of canned tuner flakes by the Heinz Group and other such related activities. The field of Supply Chain Management has been the subject of different definitions however the same. Harland (1996) is one of the forbearers in studies associated with supply chain management and considers the topic as the actions involved in handling interconnected sites that are essential in the provision of products and services. He brands some of these activities to add all motions and storage of recycleables, work in process inventory and finished goods from one point regarded as the origin to another regarded as the point of consumption. In the view of Lambert (2008), the subject of supply chain management entails the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating online value, creating a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and calculating performance internationally" (Larson & Halldorsson, 2004) while Mentzer et al (2001) also views the subject as "the systemic, tactical coordination of the original business functions and the methods across these business functions within a particular company and across businesses within the resource chain, for the purposes of enhancing the long-term performance of the individual companies and the supply chain all together" (Mentzer et al, 2001).

The theme in these explanations is quite clear that supply chain management ranges from suppliers to customers in the complete process, including outsourcing, developing syndication, inventory management, travel, warehousing, customer service, etc but the most important of them is the relevance of a credible and solid supply string management function to large range manufacturing organizations in the business of canning products so that it is with the capacity of proffering answers to troubles in inventory management in such large scale manufacturing companies. It is against this qualifications that this study is considered essential and valuable or further studies

Research Problem

In the resource chain, from suppliers, manufacturers, wholesalers to stores, every factor has inventory to meet an array of uncertainty to ensure the normal procedure of the source chain. The amount of supply string costs influences the profitability of varied enterprises in the supply chain network, and the price of inventory is an important part of source string. Inventory in traditional enterprises and under source chain management are different, and these variations reflect the impact on the inventory by resource chain management. In the traditional management setting, inventory control concentrate on the marketing of the price tag on a single stock and determine the monetary order volume and order point from storage area costs and order costs. From the point of view of inventory, this inventory control method has some applicability, but from the point of view of the complete supply string, inventory control in traditional management setting has congenital defect: Firstly inventory control lacks of assistance and coordination. In the traditional management environment, business units are individual, their missions and objectives are based on the maximum revenue. But inventory control under resource chain management, its premise is that members among the source string can cooperate and coordinate seamlessly and properly matching to certain standards of service (Cachon& Fisher, 2000).

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Thus the complete supply chain can be in step with the requirements of clients to optimise the inventory to adapt to the complex and volatile market environment. Second the performance appraisal scale of inventory control has limits. Under traditional inventory control, evaluation criteria are based on a single organization or sector, evaluation index is not related to the entire performance of upstream and downstream businesses. Only an sign of an assessment which cannot condition the control situation of total logistics cost in businesses. Finally inventory control plans are too simplistic. Regardless of manufacturers or logistics, the purpose of inventory control is to ensure that business continuity as well as source chain operations and handle uncertain demand. A lot of the traditional inventory control strategy is good for a single business and essentially uses information from the organization interior. Many businesses are unified for all those items of inventory control strategy; hence it's problematic for them to reveal source and demand uncertainty. Fourthly low information transmission capacity of inventory; information system plays an important role in helping in inventory control of business (Cachon& Fisher, 2000).

Therefore, supply chain inventory management review is significant in assisting enterprises to improve service levels, market response speed also to achieve low operating cost and exactly how to determine effective inventory control methods which displays the ideas of supply chain management. Establishing the whole idea of supply chain management, improving supply chain information showing between enterprises, optimizing implementing actions of inventory control and structuring harmonious and cooperative relationships can promote marketing of chain inventory management ideas and methods to improve supply string inventory management efficiency. A critical look at the Heinz group manufacturers of the famous John Western world tuna flakes and the Legend Kist Tuna reveals that the business is assailed with the several challenges of inventory management as explained above. The issues of the Organization is apparent in the consistency with which it changes its inventory management guidelines from whether to employ a centralized purchasing system or decentralized purchasing system to the ability to manage the inventory over the production process. It is therefore unsurprising that just in 3 years the company has had to dispense of the services of two Inventory Professionals and have positioned an advertisement on the website in search of somebody who will be able to interpret the inventory management troubles and design appropriate strategies to ensure that the business will not lose unnecessarily in its business activities that pertain to the management of raw materials, work happening and completed products.

In this paper, basic theory of supply string management will be complete and Seller Managed Inventory theory, Joint Managed Inventory theory and JIT concept of reducing inventory will be raised. It's important top note that the above conversations would be done using instances from Heinz group in order to make the issue as easy and practical as is possible.

1. 4 Research Aim and Objectives

The importance of every research is assessed by the effects that the goals and objectives could have on the overall wellbeing of population. It is the only justifiable reason which resources should be expended on the endeavor. This study is set to contribute significantly to the field of management in general and the Source Chain management in particular by proffering answers to challenges in inventory management in the production sector through the use of Supply String Management basic principle, Inventory management ideas. In the pursuance of the target the researcher has setup measurable goals. The objectives of this research include:

To give an overview of various existing supply string in the processing industry.

To examine the problems and prescribe answers to Inventory management along Supply Chain in manufacturing.

Analysis the problem with inventory management and its own impact on company performance.

To research how to use MIT, JMT and JIT principle to reduce inventory.

To examine how Supply Chain-inventory management can be carried out towards the achievement of competitive good thing about companies.

To study circumstance of reference to improve inventory problem.

1. 5 Company of the Study

In order to aid users of the study in following a logical collection of ideas and rules inherent in this review, the researcher has grouped the task into five chapters particularly the release, the books review the strategy the data examination and the conclusions. In the first chapter which is called the benefits, the researcher describes the general qualifications within which this review is taking place as well as the study problem which this study looks for to find solutions to. In the next section the researcher discusses the aims target and targets of the study as well as the relevance of the analysis. The chapter ends with a focus on of the composition of the dissertation. In the second chapter of the study the researcher discusses the depth of academic literature or secondary information that has been collected in regards to to the research based on resource string management of inventory management. The study is divided into specific sections across the objectives of the study which includes an overview of varied existing supply chain in the processing industry, inventory management along Resource Chain in making, analysis the situation with inventory management and it is impact on group performance, how to use MIT, JMT and JIT theory to lessen inventory, Supply Chain-inventory management towards accomplishment of competitive benefit of companies as well as cases of mention of improve inventory problem. The 3rd chapter is named the methodology chapter, in this sector, researcher utilizes case study and secondly data. The fourth chapter is examining data and discusses data. Inside the fifth chapter the researcher pulls some conclusions from the findings of the study and makes disclosures with regard to the implication of the analysis for industry.

2. 0 Books REVIEW

2. 1 Introduction

In the first chapter the researcher mentioned the background of the analysis and emphasized the relevance of this review as well as the aim and objectives of the study. The chapter also concluded on the way the dissertation is organised. In this section of the dissertation, the researcher talks about the nature, characteristic and emails of the different forms of academics and non academic literature that has been gathered to aid the findings of this research. This examination is important to note that in gathering this supplementary data the researcher was led by the actual fact that more value is placed on options from credible educational books and journals.

2. 2 Tendencies in Current Resource String Management Practices

Simchi-Levi (2007) shows source chain management techniques can be found in both service and making organizations even though he concedes that the practice is more pronounced in the manufacturing setup than in the service delivery sector. It is this view that has highly influenced academic and non academics studies to be favorably bias to the practice as it is carried out in the manufacturing industry. In the original work of Kumar (2008) targeted at presenting an overview of various existing supply chain in the processing industry, he was emphatic that disclosure of lots of conditions that are of major worried to the field of resource chain management and its own practice among modern-day making organizations is important to comprehend the intricacies of the trends of this field in a globalized current economic climate. His first observation which is appropriately endorsed by Ketchen (2006) in his own studies pertains to the changing stages of the management function that is immediately related to the management of materials. For the reason that work the writer was of the view that the nature of supply chain management has transformed considerably because of the finding of new models developed to help make the supply chain management function in general and the management of inventories in particular much easier. A few of these new techniques which have essentially emanated from studies of Japanese management theorist are the Total Quality Management (TQM), the Just with time Beliefs and other similar ones.

It is also important to notice that different issues which have added significantly to the different dimensions that are actually seen in the procedures and the actions involved in the supply string management. Inventory management have been seen to be a direct result of using computers in the management of inventory and the present day view that inventory management is an integrated procedure for different practical areas. He concludes his work that in modern making, the supply string is not just a management activity but a functional pre-requisite for best business profitability.

Another study into the summary of various existing supply string in the production industry is the task of Kashia (2000), he remarks modern supply chain has become more technical with the launch of computer and computer related software. But stocks in the judgment of Kouvelis (2006) that the advent of pcs into supply chain management in addition has broaden the different varieties of the practice making it difficult to present a generally suitable type or varieties of supply chain management.

Simchi-Levi (2007) is of the view that these although he introduction of computer in to the field hasn't taken away the fundamental principles that underline the resource chain management practices with which the various classifications are made and posits that in his view the four forms of supply chain management shown by Kouvelis (2006) is still popular and is seen to be the fundamental forms or types of resource chain management methods that is being carried out whether by aid from computer related software or not. These four kinds of supply string management include pipelined framework, later customization, divergent framework and convergent structure. He further stirs the controversy of suggesting that modern computer centered supply string management models have in one way or the other been influenced by these four varieties of supply chain management and continues to serve as their backbone even though his views are also criticized by Ketchen (2006), regarded as one of Japans primary supply string management consultants. Within this work the researcher concludes that an overview of various existing resource string in the production industry enforces the position that the supply chain management structures in contemporary manufacturing depends on the sort of product that is being produced and the collection of steps in the supply string process. Ketchen provides an description of the variations in the operations of the four forms of supply chain management by emphasizing that in relation to the pipeline structure it reflects that form of systemic, proper coordination of the traditional business functions and tactics across these business functions within a particular company and across businesses within the source chain, for the purposes of "improving the long-term performance of the average person companies and the resource chain all together" (Mentzer et al, 2001), which was created to ensure that the products that are produced moves through a set or group of production or assemblage stages in mass creation or continuous production. In this way he was enforcing the findings of the task of Huang, C. H. (2008) who determined that in various elements of China the form of supply string management was mainly related to this reality. He also mentioned that in source chain management systems in parts of India and Pakistan this routines was very predominant equally as he discovered similar trends of the form of supply chain management in parts of Brazil and Russia. He also mentioned that business or developing entities that were employed in mass or continuous production were likely to employ this technique as it facilitated the nature of these work. Even though he will not recommend it as the best strategy for the management of products for the reason that sector, his guide suggest that it is just a preferred option in such instances. In his meaning and exposition on the later customization form of resource chain management that it was that form of supply chain management "whereby the original phases of the development process was created to produce standard goods that are constructed and personalized to specific requirements either in local plant life or in the syndication process" (Ketchen, 2006). In this view the manufacturing of Computers, IC chips, disk drives, laser printers, electronic devices, etc. fall under this category. In further description he asserted that in overdue customization because the products variety are obtained in a overdue stage through the development process it was important to keep up inventories at a subassembly level and in customization facilities or crops which in turn assembles or configures these speedily into desired products. With regards to the supply chain management system that is considered to be always a diverging structure in mother nature, it is argued that "customization starts in early creation stages" (Ketchen, 2006). In this way he was emphasizing the position that in this form of source chain management different types of finished products are produced with a limited number of recycleables or components and argues that in the development of electro-mechanical systems such as motors, textiles, metallic fabrications and chemicals, it is imperative to utilize this form of resource string management system. At length on the previous category of resource chain management systems which he classifies as the converging structure the renowned Japanese management theorist asserted that it is the practice whereby series of assembly procedures are carried out in order to get the last product. He posits that in the engineering of aircrafts and other engineering industries the employment of this form of resource chain management cannot be overlooked. Another overview of this has been done by Huang (2009) whose work was focused on evaluating other features that are used or designed into supply string management processes to be able to ensure that it was successful. In coming to the conclusions of his conclusions he investigated source chain management procedures in one hundred and twenty different companies within the manufacturing sector for an interval of 2 yrs each. In other to have the ability to build conclusions that could represent the generalist perspective he was careful in ensuring that the selected analysis samples or companies acquired different record in industry. In this manner he ensure that he previously manufacturers of beverages, aircrafts, automobiles, locomotives engines, food supplements, furniture, stationery product, and other styles. In the end he developed his theory of supply chain and business process integrations as a match to the work of Ketchen and other such analysts.

In the study of Francis (2009) he asserted that the data given by the ex - on the classes of thought in resource string management has dished up as a basis for the development of modern supply chain management methods in the complete of Japan, China, Brazil and other areas that are believed to be embracing industrialization to a sizable extent. In the original work of (Deming, 2003) he asserted that evidence accumulated from his studies claim that successful supply chain management systems which is assessed by the successful execution of the ideas suggested that there was a there is a gradual change from managing specific functions to integrating activities into supply chain process that are considered to be key. He presents that the purchasing department places requests as requirements are forwarded by the division in need of them. In order to consolidate the integration process the marketing section or occasionally the development or purchasing office respond to this needs by phoning the various suppliers of the same items and make use of appropriate strategies to select the best offer for the organizations (Drucker, 1998). When such an activity is concluded the procedure is prolonged by the finance section who make work to respondent to the marketing or purchasing departments obtain payment after which the goods are delivered to the store for onward transfer to the needing section. He concludes that in all of this process the work of different departments are described in such a way that it's included and information shared between resource chains partners can only just be totally leveraged through process integration.

This position has also been found out by Lambert and Cooper (2000) in his studies of the modern trends in supply chain management of inventories in the establishments in the United States of America. According to his studies that were completed within a period of three months he noted supplying string business process integration includes cooperative work between customers and suppliers, joint product development, common systems and distributed information. In the work of Douglas (2008) he also made a categorization of the functions of the source chain of inventory process as underscored by Lambert in his prior studies (Fu et al, 2000). He reckon an appreciable supply string of inventory process must have customer marriage management, customer service management, demand management, order fulfillment, developing flow management, dealer romantic relationship management, product development and commercialization and earnings management at its centre and around which all resource string activities must revolve. Chwdhury (2002) on the other side is of the view that the descriptions by Lambert and his disciples are too taking and might not exactly be easily misunderstood by very easy organizations and presents another supply string management process which places management of demand, management of business lead time, tighter feedbacks from customers and market as well as customer level forecasting. He thus conclude his work by emphasizing that a simple view of source string management of inventories should integrate customer service management, procurement, product development and commercialization, manufacturing stream management, physical syndication, partnerships and performance measurement (Heung et al, 2000). Within the next section the researcher will expound on these issues in Source string management of inventories and how they work in tranquility to ensure that the functions can deliver the best form of source inventory management.

2. 3 Inventory Management and the Resource Chain

In the last section, there have a straightforward view of supply string management of inventories should combine customer support management, procurement, product development and commercialization, processing stream management, physical syndication, partnerships and performance measurement. Russill (2007) talks about the first degree of inventory management which he considers to be the procurement process. He is of the view an understanding of inventory, its nature and its importance is very crucial in underscoring the fundamental elements that are inherent in inventory management. He endorsed the sooner position kept by Ballou (2009) that nowadays, developing enterprises facing brutal competition in the market, customer requirements changeable, recycleables procurement cycles is long, therefore more and more enterprise give consideration on inventory and inventory management. In explaining the intricacies of inventory management across the supply string, he asserts that in developing business, inventory consists in products, raw materials, done goods and emphasized that inventory exists to avoid the event of sold-out, however inventory have cost, especially the organic materials inventory required large amounts of cashflow, hence, reduce uncooked materials inventory and reduce the price of inventory is very important for manufacturing businesses. It is for this reasons that the management of inventory is considered to be extremely important as there are a variety of challenges that must definitely be overcome and supervised in such a way that it'll deliver the expected. In the work of Slack et al (2007), the emphasis was on the troubles that get excited about the management of recycleables. He is of the opinion that the major obstacle in the management of recycleables is the decision of the proper partner or company who is able to be depended after to supply the materials as well as the scope to which recycleables must be stocked in the warehouse to support production operations. In his assertions he emphasized that in the techniques of selecting the supplier lots of factors must be looked at to the scope that the supplier should be the one that provides the best materials and at the most nominal prices possible. In this particular interconnection he asserts that the establishment of any procurement process that hinges on open tender is advisable as it makes prices right down to the barest least.

Even though this position is performed by Bojanic (2007) in his contribution on the problems of inventory management that entails the choice of a supplier he is of the view that in the quest for bare minimum prices it may well not be possible to employ a tendering method all the time but presents situations to aid the view that in most instances the outright selection of a dealer is critical. In the work of Tyndall (2008) his focus on selecting a dealer revolved around how the business can sustain the ongoing flow of recycleables from the distributor. By this position he was underscoring the need for strategy in the procurement of raw materials and insists that each company that is worth its work must be sure it has tactical suppliers it can be based upon all the time to supply at the most competitive prices. In furtherance of this he is of the view that a business business must most importantly consider suppliers whose credentials are known and have to capacity to provide in any way time with good payment terms. Other experts such as also have discussed the issues involved in way to obtain raw materials by focusing on advantages and the drawbacks of the centralized and decentralized purchasing systems that are used to purchase raw materials in the resource chain management process. He describe the centralized system to imply the machine of purchases whereby the specific team that stands in need of a particular uncooked material bears out its own form of purchases while the system whereby a separate team is mandated to handle the buys of the fresh material is called the decentralized purchasing system. He's of the view that the business would have to identify which situation will demand centralized methodology and which will require a decentralized methodology and conclude that in every instances your choice should be completed in such a way that the business would be the best beneficiary.

In the task of Ofei (2007) his concentrate was on the problems that group face in term of what constitute the best degree of stock that must be kept with what level should business reorder their new stock. This is classified in the field of inventory control as the lowest stock levels, maximum stock levels, re-order levels and other levels that are necessary to assist management decisions. In his view these issues are necessary to the magnitude that the organizations failure to manage them appropriately can have huge repercussions on the business in terms of cost. He emerges from the idea of view that whenever organization maintain an even of inventory that is very low, it will lead to lack of ability to meet creation schedules which can further lead to lack of ability to meet the demand of consumers and quick lucrative business opportunities. For the reason that sense the business enterprise organization would be considered as one that struggles to provide what the customers need at the correct time. In the same vein maintenance of a tiny amount of inventory can lead to very dire results in circumstances where there are immediate shortages. The advantages that they put forward because of this is the actual fact that the business can use funds saved for other operational issues. Inside the same light the management of inventory is highly enthusiastic about the highest level of stock that must be kept in the organization because of the fact that the purchase of inventory can result in locking up capital in stock especially in an environment where demand is on the drop.

Among the advantages that Mentzer (2001) sets forward as impacting on the maintenance of a higher degree of stock is the price of storage area and space that are associated with this. Within the same vein the trend for some highly perishable goods to go bad hence resulting in huge losses as it is the case in several instances is the result of this fact. Within an earlier research by Russill (1997) where he concludes on the tactics of setting up the reorder stock levels, the minimal stock levels and the maximum stock levels, he discovered that the routines within the sector required that these stock levels be occur regards to the demand of the primary products as well as the extent to which there are fluctuations within the market as well as the financial resources and space available to the organizations. He strongly advocates that mere knowledge of these factors are not commendable enough and asserts a business organization must systematically gather data and analyze its different measurements and implications over a time frame before setting these levels. In his research he pointed out that as Simchi-Levi (2007) discovered that business organizations within the same industry duplicate the vision and mission assertions and only change the words, there were lots of situations where organizations working in the same industry duplicate their different stock level from each other and warned that that may be dangerous as business circumstances can be entirely different. He concludes his studies by emphasizing on the procurement process as well as the copy of recycleables to the various cost centers from the store.

In that summary he was categorical in stating that the procurement prices is a technique of course, if business refuse to see it like that then there is a tendency not to see the importance of it. With this view he asserts that strategic plans are drawn up with suppliers to support the manufacturing movement management process and the development of new products. He concludes his work by making a very critical statement to the effect where he asserted that "the purchasing function evolves rapid communication systems, such as electric data interchange (EDI) and Internet linkage to convey possible requirements more rapidly. Activities related to obtaining products and materials from outdoors suppliers require resource planning, source sourcing, negotiation, order location, inbound transportation, storage, managing and quality assurance many of which include the duty to coordinate with suppliers on matters of scheduling, resource continuity, hedging, and research into new resources or programs" (Francis, 2009). Within a related research into aspects of inventory control which requires effective management Russill (1997) of the Chartered Institute of buying Supply (UK) underscores the value of partnership, communication and logistics, stock control and cashflow issues in inventory management. In a report of the collaboration of Wal-Mart and Procter & Gamble which goes back to the 1980's in which he emphasized on the importance of companions in managing inventories he said that both giants built a software system that connected P&G up to Wal-Mart's syndication centers. When P&G's products run low at the syndication centers, the system sends an automatic aware of P&G to deliver more. In some cases, the machine communicates right down to the individual Wal-Mart store, allowing P&G keep an eye on the cabinets through real-time dish link-ups that send emails to the stock whenever a P&G item swoops past a scanning device at the register. Till today the advantages of this relationship is noticeable in the adoption of the radio-frequency id (RFID) technologies to gain even more insight into ridding inefficiencies in the resource string. By this exposition the mature researcher was not only underscoring the value of relationship, but way more on the immeasurable worthy of of communication which means that at all times the person there is interaction one of the managers of inventory to ensure that the business will not unnecessarily lock up capital in stock resulting from over acquisitions or run less than stock which can lead to lack of very lucrative business opportunities and in the end to loss of customers who are considered to be very strategic to the business. The researcher was also emphasizing that in the logistics management communication does not simply entail the verbal exchange of information between your partners but was pivoting on the role of transport and the appropriateness of your choice of transport which he presents as a key success factor in every success inventory management practice. He is of the opinion that this can be a good solution for reducing cost and ensuring that there is uninterrupted stream of cash resulting not only from bad purchasing planning but also goods in transit.

In another section the research will discuss a few of the implications of the difficulties of inventory management on the performance of industry.

2. 4 Inventory Management Problems and Organisational Performance

In the work of Kumar (2008) his emphasized the positioning for the developing industry an engagement of its resources includes an opportunity cost. He underscored the actual fact that in any decision to embark on a particular plan of action requires an outlay of either or a combo of or most of money, materials, equipment, manpower and minutes. In this manner he was emphasizing the actual fact that a whenever a business does not take appropriate steps there may be debilitating consequences in various forms in relation to resources. In specific regards to the inventory management issues he's of the view that since inventory management contain everything from exact record keeping to transport and receiving the products as well as dispensing from the store to the needing departments the emergence an issue along these processes or items can have implication for industrial cost, in conditions of wastages, safe-keeping, perishability etc. Larson and Halldorsson (2004) summarizes the problems involves in the problems of inventory management by asserting that "Inventory management problems can hinder a company's revenue and customer support" (Larson and Halldorsson, 2004). They can cost a business more money and can result in an excess of inventory overstock that is difficult to move. Many of these problems are usually due to poor inventory procedures and out-of-date systems" (Haag, et al, 2006). Early analysts such as Francis (2009) have categorised the problems of inventory management into twelve categories which also suggest a twelve point implication of problems of inventory management on the Organisation. In relation to this they identify inventory management problems in relation to the problem where unqualified employees are put in charge of inventory, using a measure of performance for their business that is too thin, a deficient or unrealistic business plan for a business for the future, not determining shortages in advance, Bottlenecks and weak points can hinder on-time product delivery, dropping sufferer to the "bullwhip effect", too much distressed stock in inventory, unnecessary inventory in stock and struggling to move it quickly enough, computer examination of inventory items on the market is incorrect, computer inventory systems are too complicated, items in-stock get misplaced and too much distressed stock in inventory. Kumar V. (2008) talks about the implication of experiencing unqualified personnel in charge of inventory functions. According to him there's a general tendency to take care of the procurement of inventory as well as the keeping of inventory as an under management issues. He argues from an event gathered in looking into the practices in several market sectors that on many occasion the store keeper lacks any form of proper qualification and hardly has a say in managing the store. He's of the view that the consequences of this is the actual fact that it could lead to the acquisition of the wrong type of inventory or at best a one which is below quality as the utilization of an incorrect quality of inventory can lead to the development of below quality products. This chain may also brings about inability to sell the products on time and could eventually lead to lack of customers when the methods is continued in addition to the fact that storage space cost among others are unavoidable. It really is against this background that he argues that the issues of inventory are also a chain in nature as you error may lead to another form of mistake. Mentzer et al. (2001) talks about the implications of experiencing the wrong estimation of the merchandise inventory needs of the Company by affirming the sooner view of Deming (2003) that in the cases where wrong maximum stock level, least stock level and economic order level or stock re-order level is defined by the Organisation, the obvious consequence is the fact that highly rewarding business which are incredibly common running a business Organisation may be lost because of the fact that capital may be locked up in stock apart from the cost incurred in providing space for storage and security to the inventory. Kern and Willcocks (2000) on the other hand have looked into the Computer diagnosis of inventory items on the market is inaccurate. In their view the most irritating parts of the clients life is to receive the guarantee from a dealer it has a product and it turns out that they do not have especially at a time when the customer has made critical commitments predicated on the information that has been distributed by the supplier. This example is recognized by him as circumstances where businesses give assurances of these potential to provide stock with their customers when unknowingly they don't have at all (Prater et al, 2001). He concludes his work by asserting that way too many people and businesses expect that the computer documents are infallible. However the records need to be entered by the person if the person sensible does not keep accurate details, it can turn into a genuine frustration. Inaccurate inventory records can easily bring about loss of money and strained customer support (Handfield & Bechtel et al, 2001).

2. 5 Modern Method of Inventory Management

In discussing the obstacles that are inherent in the management of inventory, point out has been made of the issues in relation to time and storage area cost as well as security cost and other such related troubles. It has additionally been noted a volume of action plan training seminars, meetings, and symposiums have been organized across the globe to find ways where the obstacles in Supply string management generally speaking and the inventory management in particular could be increased in order to help business organizations to save substantially on this front. It is important to also remember that as the development of software applications have played immeasurable role in ensuring enhancing the management and control of inventory the computer itself has been accused of creating its on problems in inventory management. The above issues and other such ones have always played out precious role in the seek out a competent system that is with the capacity of making certain business organizations are able to effectively take care of their inventories in such a way that maximum gain is achieved. on the basis of this may researchers and scholars placed themselves to process in the anticipation of finding a light at the end of the tunnel but it was not before period across the threshold of the third millennium that some form of break through emerged essentially from the exploits of Japanese management theorist who first formulated modern production theories including the MIT, the JMT, the Total Quality Management (TQM) and the Just with time Systems (JIT)

Halldorsson et al (2003) clarifies the Just in Time system to be a procedure for the management of inventory whose aim is to produce or procure products or components as they are required by a person ort for use rather than for stock. He further argues that a Just with time system is a yank system which responds to demand as opposed to the thrust system in which stocks serves as buffers between the various elements of the machine such as purchasing development and sales. Kouvelis et al (2006) on the other side will not depart thoroughly from the views of the former but explains that the underlining school of thought of the Just with time system is that it enables producers to control their inventory by wanting to buy inventory only once the demand for something is done. This also means that there are effects on development procedures and purchasing operations to the scope that while Just in Time purchasing system enjoins on manufactures to only make commitments with regards to purchasing materials in such a way that receipt and usage of the materials coincide to the maximum scope possible, The Just with time creation system premises on the actual fact that production systems are put set up and production functions commissions only in the cases where there is demand for done goods as well as the problem whereby each aspect on a development line is produced only once needed for the next level. ( Haag et al, 2006).

In the task of Cooper et al (1997) they emphasized that the major benefit that a business gains from using the Just with time system is the actual fact so it reduces the situation where in fact the capital is likely to be locked up in stock which can curtail all the associated problems with it. The system also gives an overview of how cost implications for storage area and security on materials can be saved.

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