Optimization of Inventory

Abstract

Inventory management is a vital part of the supply chain and inventory is needed to be stored in adequate quantity so that the production is not hampered in any way but at the same time it is equally vital to manage them efficiently in order to minimize the costs in different ways to the organization. I was fortunate enough to be a part of the esteemed organization Ford India Pvt. Ltd. which needed to maintain an optimal amount of stock to stay away from breakdowns and stockouts. The stock turnover proportion has been estimated to decrease for the period from Apr'21 to Dec'21. This has occurred because of worth of announced stock expanding than the normal incentive for the same period. So, it was being noted by the company that many items in the store were being kept with different company codes for the same item and manufacturing part number. Hence, due to these the problem of duplicates started to arise which made the capital to get reduced as the parts in spite being available were ordered again. Moreover, it was found that some parts were lying within the stock much more the required quantity which ultimately made the budget to get reduced for critical spares that were needed to be timely reordered. Thus, by better management the stock will not only exceed the required levels but will also be available when demanded. Lastly, spares and consumables can be ordered by doing blanket orders which will help in saving costs rather than ordering all at one go based on the frequency of usage. Thus, by adopting better strategies it can help in optimizing the inventory and in saving more budget for required items.