The Improvement Scheme In Inventory Management For Pharmaceutical Company M

Pharmaceutical industry is very important in the people’s livelihood. At present the domestic pharmaceutical enterprises are enduring fierce competition, rising cost and pressure from intensified regulation. In the pace of economic globalization, pharmaceutical industry-in China is also challenged from abroad. Low inventory turnover and high inventory cost have become the prominent problems for pharmaceutical industry in China, while the gap in inventory management between Chinese and foreign pharmaceutical enterprises stays very large.M Company is a rapidly growing pharmaceutical company in small and medium size, and its managers consider that it’s very necessary to improve the inventory management. In this paper, the scheme of improving M’s inventory management would be done in following order: identifying problems, analyzing problems and solving problems. Based on the literature review, theory studies and case studies, this paper proposes an inventory management improving scheme for M company, in order to solve its three main problems in lacking of material classification, lacking of scientific sales forecasting and simultaneous shortage and redundancy in materials. Those targeted suggestions are give in aspects of ABC classification management, time series forecasting and inventory control model implementation. Box-Jenkins method and simple seasonal index prediction method etc. are used on different material classes as forecast improvement methods;(R, S),(R, Q) and (t, S) inventory control models are applied to different material classes. Finally given in this paper are adjustment suggestions on M’s personnel allocation and information systems structure.The study method and measures used in improving inventory management of this paper can also be borrowed by other small and medium sized pharmaceutical enterprises which face those similar inventory problems.