It increases inventory turnover by ten(10) and reduce costs by 10% to 40%. The role inventory management is to ensure faster inventory turnover. As a result, inventories have been decreasing in many firms (Sawaya Jr.and Grauquw,2006),although evidence of improved firm organizational productivity is mixed(Tement et al(2010). This approach to inventory management brings considerable cost savings from reduced inventory levels. Since at least the early 1980s, inventory management leading to inventory reduction has become the primary target, as is often the case in just-in-time(jit) systems, where raw materials and parts are purchased or produced just in time to be used at each stage of the production process. Consequently, many companies have changed their approach to production and inventory management. However, large buffer inventories consume valuable resources and generate hidden costs. In traditional settings, inventories of raw materials, work-in-progress components and finished goods were kept as a buffer against the possibility of running out of needed items. Therefore, inventory management approaches are essential aspects of any organization. Vohra 2008 argued that today, the cost of holding, extensive product proliferation and the risk of obsolescence, especially in rapidly changing markets, make the expense of holding large inventories of finished goods excessive and that high demand items naturally have safety stock assigned to them, but in many organization there are so many very-low-demand items that keeping any stock of these items is unreasonably expensive, so they argue that companies must now provide good services while maintaining minimal inventories. Therefore, organizations are exploring ways towards postponement strategy in response to constantly changing demands. INVENTORY MANAGEMENT AND ORGANIZATIONAL PRODUCTIVITY (A CASE STUDY OF COCA-COLA COMPANY PORT HARCOURT BRANCH)Ĭompanies face a dilemma in today’s competitive marketplace, where on one hand, customer demand customized products and services and require that their orders are filled quickly, but on the other hand they do not want to pay a premium for this customization and availability (Vohra 2008).
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |