inventory management and case studies examples

1. 

A stock of items held to meet future demand
Inventory is a list for goods and materials, or
those goods and materials themselves, held
available in stock by a business.
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2. Work in
process
Vendors
Raw
Materials
Work in
process
Finished Customer
goods
Work in
process
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3. Raw Materials – Basic inputs that are converted into
finished product through the manufacturing process
 Work-in-progress – Semi-manufactured products
need some more works before they become finished
goods for sale
 Finished Goods – Completely manufactured
products ready for sale
 Supplies – Office and plant cleaning materials not
directly enter production but are necessary for
production process and do not involve significant
investment.

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4. Ensure a continuous supply of raw materials to facilitate
uninterrupted production
 Maintain sufficient stocks of raw materials in periods of
short supply and anticipate price changes
 Maintain sufficient finished goods inventory for smooth
sales operation, and efficient customer service
 Minimize the carrying cost and time
 Control investment in inventories and keep it at an
optimum level

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5. 
Meet variations in customer demand:
◦ Meet unexpected demand
◦ Smooth seasonal or cyclical demand

Pricing related:
◦ Temporary price discounts
◦ Hedge against price increases
◦ Take advantage of quantity discounts

Process & supply surprises
◦ Internal – upsets in parts of or our own processes
◦ External – delays in incoming goods
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6. To maintain a optimum size of inventory for efficient and
smooth production and sales operations
 To maintain a minimum investment in inventories to
maximize the profitability
 Effort should be made to place an order at the right
time with right source to acquire the right quantity
at the right price and right quality

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7. -Track inventory
–How much to order
–When to order
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8. 
When a submarine arrives at the Pearl Harbor Naval Shipyard (PHNSY), it
undergoes a well-planned schedule of maintenance, overhaul, repairs, and upgrades.

On-time completion of these and other maintenance-type operations play a major role
in maintaining the readiness of submarines in the Pacific.
To ensure these critical deadlines are met, PHNSY relies on skilled mechanics in
three shifts a day and some weekends.
According to Iris Seiki, PHNSY Supply Systems Analyst, not having inventory readily
available for the mechanics on all three shifts and weekends has a direct impact on
the project and on other people's job.



9. Problems:
•stores tooling, personal protective equipment (PPE), and consumable
products in centrally located tool rooms.
•With the exception of the occasional walk and wait time to and from the
waterfront tool room, getting the needed items for the task at hand was
generally a simple process
•Because the tool room was staffed for the first shift only, getting materials
was somewhat more complicated for the other shifts.
• If the mechanic from the previous shift didn't turn over the materials to the
next shift, he/she would have to submit an item request for the needed
materials for the task at hand.
•the materials came 24 hours later.

10. Problems:
-Work stoppage due to inefficient processes
-Wasted time walking to and from tool room
-Inventory shrinkage

11. 
PHNSY looked to WinWare, Inc., the makers of CribMaster to provide a
solution.

CribMaster is a set of inventory solutions used in military and other
industrial-type environments.

In their search for a storage system that offered flexibility, PHNSY chose a
suite of ToolCube™ point-of-use devices

Located them dockside where the submarines undergo maintenance.

The ToolCube™ is a large, heavy- gauge-steel constructed cabinet that
contains drawers and compartments of various sizes

12. Tasks performed by Toolcube
TM
•The mechanic simply scans his/her badge and selects the item requested.
• CribMaster then provides access to only the approved quantity of the exact
item requested.
• With the ToolCube's™ unique storage system of configurable drawers,
PHNSY could accommodate many different types of inventory.
•The capability of adding more devices as their operation grew and controls
needed to be tightened.

13. 
Stock-outs in their consumable materials have been greatly reduced.

The min/max feature on the software ensures optimum inventory levels by
sending an email alerting someone when replenishment is needed.

More importantly from the mechanics point of view, they enjoy having the
right material at the right time 24 hours a day, 7 days a week.

This has allowed them to do their job regardless of which shift they are
working and allowed PHNSY to control material usage all at the same time.

14. CASE STUDY - BOEING (UK)
Unrivaled Accuracy: RGIS Pilots Inventory Program for UK CH-47
Chinook
CHALLENGES:
-In May of 2006, Boeing formally commenced work on the “Through Life
Customer Support” programme for the Royal Air Force’s (RAF’s) fleet of
Chinook helicopters.
-Boeing had previously manufactured and sold the Chinook helicopters and
parts to the RAF.
-Prior to the awarding of this maintenance contract to Boeing, the RAF
maintained these helicopters in-house and managed the tracking of parts in
stock with two inventory systems.
-The value of the parts varies from a few pence to over £1,000,000 per item.
-The parts are located on RAF/MOD installations in the U.K. and around the
world.

15. CHALLENGES:
-The information had to be viewed separately, consolidated, and then
reported globally back to Boeing and the MOD.
- Parts in stock are assigned a designated location within a base.
-For security reasons, an individual stock item may have several locations
within a base.
-This meant there was no central view of which parts were at which base, or
at what location(s) on a base a part was stored.

16. SOLUTION:
-RGIS staff members worked with Boeing, RAF/MOD, and DARA to complete
this project.
- RGIS provided auditors along with managers and operations support
personnel working across five U.K. bases.
-The RGIS program was divided in three steps:
 The RGIS Process Pre-Inventory
The RGIS Process Inventory:
 The RGIS Process Post-Inventory:

17. The RGIS Process Pre-Inventory:
• RGIS worked with Boeing in a tight schedule window, to accomplish the
inventory in one week less than was initially required.
•Scheduling challenges included the following:
>The very limited availability of RAF/MOD and DARA staff, who were
required to assist with locating and opening some parts containers
>The requirement that the same part had to be counted in all locations
around the world at one time
>Part counting had to be completed in a specified four-hour window or else
that count would be invalidated in other locations.
>RGIS created a custom inventory programme to facilitate the many and
varied streams of information that were required

18. The RGIS Process Inventory:
•RGIS captured and reconciled the data at the five U.K. bases.
•Parts were categorized according to class and condition and whether the item
was removed from an aircraft for repair.
•Counts were compared to the quantities on record in the RAF databases
•Variance reports were generated in real time.
•Items showing discrepancies were recounted.
•Fully reconciled data had to be made available twice daily.

19. The RGIS Process Post-Inventory:
•RGIS provided Boeing with a consolidated file showing the global position of
each parts line captured compared to the quantity expected at the time the item
was counted.
•Interim reports and final information were provided on the secure Boeing
website for ease of access by those with permission to view the data.
•Boeing and the MOD were able to obtain an accurate inventory count
•They could more readily identify where they would have an urgent and
immediate need for parts.

20. BENEFITS:
•RGIS provided an accurate, reliable and efficient inventory resulting in
improved product availability and process improvements for the future.
•Excellent track record in accurate and consistent data-gathering techniques
across multiple sites
•Proven scheduling flexibility
•Effectiveness in working with multiple project partners
•Efficient project coordination and data reconciliation abilities
•Employee integrity
•RGIS provided an inventory program that helped Boeing reduce their costs
and improve their processes.

21. Case Study
Inventory Management System
Manufacturing Company
Problems:
•A global manufacturing company was experiencing inefficiencies in in
its inventory management processes.
•With suppliers across the world delivering parts for the company's
products
•Multiple buyers within the company are responsible for tracking the
parts required for each product from the manufacturing phase through
delivery
•The company needed a way to keep a master list of all inventory with
easy access to parts' delivery statuses and other pertinent information
relevant to the company.

22. Approach:
•Aciron initiated the project by holding extensive interviews with client personnel to
understand the company’s needs and challenges.
•Aciron followed an agile, iterative, approach to application development
•Allowing the client to regularly review and make adjustments to the application,
and to easily incorporate the clients' evolving requirements.
•Throughout the project, Aciron focused on open communication, with regular
status reports and meetings.
•Consistently engaging key client personnel and ensuring project milestones were
met on time and within budget.

23. Solution:
•Aciron developed a custom database driven inventory management application
•Application enables the company's multiple buyers, regardless of their locations, to
easily track, manage, and generate reports regarding the company's inventory and
deliveries
•The user interface of the application was developed to be clean and user-friendly,
enabling users to easily navigate and utilize the system.
•The intuitive automated system provides the client with a rapid, accurate, and
efficient means to collect, process, transmit, record, and manage inventory data.
•Providing a clear view of any inventory shortages and delays, along with
comprehensive communication tools
•The system eliminates the need to rely on traditional means of communications,
such as phone and email, etc., to manage such delays
•The system also includes an extensive set of reporting mechanisms to allow the
planners, project managers, operations managers, and buyers to more effectively
maintain inventory.

24. Benefits:
•With on-demand access to up-to-date detailed data on the company's
inventory, the client is able to make more informed decisions.
•While reducing costs and inefficiency within the company. In addition, as a
browser based application
•The system eliminates the inefficiencies inherent in using multiple
spreadsheets and manual processes involved in tracking and managing
inventory by creating one secure, central solution.
•Since completion, the system has proved to be a critical business application
for the client, driving productivity and increasing margins, while reducing costs