Inventory Reduction Through Optimizing Operation Process

This article first introduces the basic information of SSF and gives brief analysis on the environment and competition of the company. Then, points out four major problems existing in the operation system, such as the irrationalities of process layout, the flaw of production plan management system, the lack of advanced technique usage during the process of making production plan and the low efficiency of product after-casting process. In succession, raises the basic thought of action plan to solve the problems, which include strengthening production-sale connection, improving production plan system, reengineering product flow, implementing innovative management mechanism, using advanced production plan technique and optimizing production execution system. This article focuses on how to gradually solve problems existing on plan, product flow and production execution system through the implementation of modern management theory for the purpose of reducing inventory stock, shortening production cycle and decreasing product after-casting cost. On aspects of the optimization of production plan system, this paper addresses how to standardize production plan flow, accounting flow and strengthen management communication to balance the functionality among production, sales, development, equipment and finance in order to achieve healthy operation atmosphere within the company.On aspects of business reengineering, this paper mainly focus on how to shorten operation step and expedite after-casting process. Especially, in this part addresses how to implement'Everyone is manager'management mode in order to really root the idea of continuous improvement.This paper also raises the basic thought of an innovative production mode which combines the idea of both pull mode and push mode. Under this combined production mode, the casting production and after-casting production are controlled by push and pull mode respectively, specially aiming to the characteristic of foundry production. By this kind of combined production mode, the position and quantity of stocks is controlled, the on-time delivery rate is increased and the total cost is reduced. This production mode has common use of reference in foundry industry. This paper also addresses how to get economic production batch under suitable safety stocks which guarantee expected on-time delivery rate. In addition, this paper introduces the specific method of how to get the suitable number of Kanban between operations.This paper evaluates the improvement by comparing inventory quantity, average product cycle time and after-casting cost between 2005 and 2006, and the result shows clear improvement of the above three indexes.The content of this article is closely based on the actual condition of a company which has profound background of state-own enterprise, and all the improvement actions are concretely proved by typical indexes, therefore, the improvement actions in this article are important references to similar companies.