Research On The Improvement Of The Inventory Management About HB STEEL CO., LTD

The iron and steel industry is an important pillar industry of the national economy in ourcountry, and it is the material basis for the development of the national economy and nationaldefense construction. It’s very important for the medium-term industrialization developmentof our country’s economy. The steel production of our country has been the first place in theworld, but after the financial crisis, the steel industry of our country has received the hugeimpact, the capacity is gradually expanding, the raw materials’ price is higher, and theenterprise efficiency is lower. While in the steel market downturn, many iron and steelenterprises did not control the inventory quantity timely, excessive inventory not only takesup the liquidity, reduces the mobility of capital, produces a lot of management costs, but alsohas huge inventory valuation loss, swallow large amounts of profit for the enterprise, bringthe difficulty to the management of enterprises, worsening the situation in the steel industry.So, in order to strengthen the management of iron and steel enterprise’s inventory, keeping therational and effective inventory level is the important measure of improving the economicefficiency of iron and steel enterprises, and maintaining the important guarantee of fundsvirtuous circle.This article mainly discusses the influence on inventory situation of HB Steel Co., Ltd.HB Steel Co., Ltd. is a development state-owned enterprise who has a long history. It is thelargest in China and world’s second oversize of iron and steel group. But in recent years, themanagement situation of HB Steel Co., Ltd. is not optimistic, and when we observe the HBSteel Co., Ltd.’s inventory, we can find the situation is bad. Its inventory turnover is muchlower in the peer. It is particularly important for HB Steel Co., Ltd to improve the inventorymanagement model, reduce the inventory holding cost and the flow of the enterprise capitaltakes up, and improve the inventory management mechanism. The paper points out theproblems of inventory management in HB Steel Co., Ltd., and then puts forward the solutions.The solutions include six points: reducing the proportion of raw materials in inventory, basingon seasonal characteristics, estimating reasonably inventory write-down, improving the internal and external supervision mechanism, and putting an end to conceal behavior, andeliminating the blind pursuit of capacity behavior, and improving the ERP information system.We expect to perfect the inventory management system of HB Steel Co., Ltd., improve theinventory turnover rate, and then increase the liquidity of funds. Finally, we can improve theoperating conditions of HB Steel Co., Ltd.