Week 7: Do we really need an inventory?
O.K. we covered Lean Supply Chains in Chapter 14 but do we really need
an inventory? After reading chapters 20 & 21 what is your take on the
inventory requirements needed to run a business?
Week 7 Discussion: Do we really need an inventory?
According to my opinion, inventory is required so that the wait time is zero for the customers of a product or service. Chapter 20 asserts the need for inventory which is a cushion between the process of production and the customer (Jacobs & Chase, 2020). Most manufacturing plants and organizations hold inventory on their hand because of the reason that no specialty products are sold by the manufacturer and in general bulk of items are sold. Only specialty retailers or businesses that create unique products should preserve inventory since their buyers will demand something unique and have alternative perspectives. Even so, they ought to have templates of design to find things simpler for clients to follow and to reduce the amount of time to produce the products.
To reduce unnecessary expenses, it is indeed vital to obtain just in time, but some organizations can look into things like issuing recommendations or auto-refilling supplies. For instance, instead of always going to the market when they run out of products they require, a new parent can choose whether to purchase online at retailers like Amazon for automatic replenishment of the products they use the most. Nappies, tissues, and formulae are examples of such items. The monthly subscription is advantageous since it is adapted to the requirements of the consumer and avoids inventory waste. As a result, inventory is required to run a business in this instance (Unleashedsoftware.com, 2022).
Consider shop for groceries franchises, for example. They must keep inventory on hand because, on the occasion of not having an inventory to store products, they will lose customers. Dealerships of cars seem to be in a similar scenario; companies possess a very little window of opportunity to acquire the business of a customer because the consumer is continuously seeking the greatest value, a trustworthy automobile, and then whatever features they desire. Also covered in Chapter 20 is the level of inventory, which refers to the quantity of inventory carried more than the predicted demand (Jacobs & Chase, 2020). This is beneficial in the event of a rise in sales since one will have sufficient supplies on hand. With inventory level, they also debate limited quantity of goods and fixed terms. Systems with a defined amount of time, make the safety stock, that is the level of inventory reordered at the time of review, and the fixed order quantity system continuously checks the inventory level and places a new order when the stock reaches a particular level. These different models are intriguing since they each have their own techniques for tracking stock and inventory, and there is no one-size-fits-all approach to monitoring levels of inventory and replenishing what is required. According to my belief, a predetermined quantity ordered is preferable since the manufacturer will be aware of when a specific level of order is approached and the handling of the order will be done efficiently and regularly, ensuring that the company does not even have less or more on hand.
Automobile technicians rely on inventory to stay in business. They can fix a variety of automobiles that arrive at their repair center because they have the necessary supplies and equipment or in an adjacent facility. This is critical since most clients want a technician who can really complete the task swiftly and without interfering with their private affairs. If the inventory of the mechanic is low or insufficient to meet a requirement or the needs of its customers, they will undoubtedly lose sales. In conclusion, it is necessary to acquire enough amount of inventory, for the company to run its business efficiently.
References:
Jacobs, Chase, F. R. R. B. (2020). Loose Leaf for Operations and Supply Chain Management (16th ed.) [E-book]. McGraw-Hill Higher Education (1/7/2020).
Unleashedsoftware.com (2022). Four very good reasons to hold inventory. Unleashed. Retrieved from https://www.unleashedsoftware.com/blog/four-very-good-reasons-hold-inventory [Retrieved on February 22, 2022]
