The Role of Inventory in Supply Chain Management

Globalization of business requires efficient Supply Chain Management. The science of supply chain further connects with mathematics and management to efficiently deliver the goods in a regular base.

Many mathematical functions are being hypothesize and eventually uses as the bases for the business operations. Today, businesses are integrating their supply chain formulation with the help of the internet infrastructure. Certainly, Inventory Management considers some important elements that SME companies must consider.

INVENTORY MANAGEMENT IMPORTANT CONSIDERATION:

1. Raw Materials- are the essential aspect of the supply chain. If we look at the diagram of the supply chain, raw materials is the first part of the continuum. If the raw materials are scars then the price will automatically go high relative to the supply of the commodity.

2. Purchased parts and supplies- are the accessories being installed to the raw materials being produced to another product. The value added by the company is the reason for the finished product to increase its market price. Further to that, added value is a contribution from the R&D department imposed to the production department.

3. Work-in-Process- refers to the products that are still in the production line. The common problem that will arise in the production line is when the delay of finishing one product will affect other products that are in Work-in-Process

4. Items being transported- is the actual transportation of goods using the logistics management techniques to transport the goods from the point of origin towards the point of destination. As an overview, logistic management approach may differ depending upon the nature of the product consider the physical nature of the given merchandize.

5. Tools and Equipments- refer to the paraphernalia’s being used from the production stage until to the delivery of the product. Logistic management requires good tools to execute the business operation.

OPERATIONS MANAGEMENT BOOKS RECOMMENDATION:

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Comments

Unknown said…

Supply chain cannot be done without the sufficient inventory. You have to make a proper records of your goods and transport work.
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May 31, 2013 at 6:35 PM

Avant-Garde said…

Indeed, Sufficiency of goods will make the flow and cycle of the whole SCM. Thanks for the comment Mr. Peter.

May 31, 2013 at 10:29 PM

CuteRimi said…

Fist rated blog! I'd like to add. When it comes to effective supply chain and inventory management, redundancy is everything. Have a back-up supplier (one is good—you don’t want to manage too many suppliers). Not only will they prove invaluable in the event of production or logistical issues, they can also give you some competitive leverage and help ensure you maintain the best cost base across your suppliers. thanks a lot! clicking here

July 21, 2013 at 10:42 PM

kingkinu said…

Hi, I just say- don’t forget communication. If you are able, try to meet directly with your suppliers. Get to know and respect their cultural and business backgrounds and train your entire team to be aware of and sensitive to any differences should they arise.Cheers:) click this link

July 21, 2013 at 10:47 PM

to cuteRimi & Kingkinu thanks for the insights

July 21, 2013 at 10:49 PM

Nitin Patidar said…

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December 19, 2013 at 3:17 AM

0s0-Pa said…

And that's why it pats to do a little research before hand and find a viable inventory software package.
-Jake

February 19, 2014 at 9:19 AM

Thanks for this post. I've learned a lot about inventory management. logistics management

February 27, 2014 at 9:29 AM

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June 23, 2014 at 8:01 PM

Edgar C. Jones said…

Supply-chain management is a complex subject and of keen importance to the efficient operation of an enterprise. The Internet has brought about new opportunities and challenges in managing the supply-chain. Clipping Path service

July 16, 2019 at 5:21 PM