Research On Raw Material Inventory Management Improvement Of T Company

T Company’s main products are power tools and small garden machines. With moreand more companies begin to produce the same kind of products, T Company should improveits overall operation and management competence to maintain and enlarge its market share.To improve the inventory management is one important factor in company operation.Unreasonable inventory will occupy the room or warehouse, need more human resource tomanage the inventory, occupy a large amount of cash.And the most important one is thatunreasonable inventory will hide lots of the operation problems, since once your inventory ismuch more than what you really needed, the production line will not stop, the quality issueswill not affect the delivery of finished goods. It seems the company is running very good, butin fact, this smooth running is base on great waste of money and other resources. It’s verynecessary to improve the inventory management level.Through study the present inventory management status of T Company, we find themain problems need to improve is Inventory Turnover Days, Finish Goods On Time DeliveryRate and Finish Goods Order ForecastAccurate Rate. This paper studied the detail ofinventory items and suggested to classify the raw material intoA, B and C three types, then,provide related management methods for these three different types of material. The mainmethods include setup Days of Supply monitoring system for inventory, setup EconomicOrder Quantity and Reorder Point for B and C types of materials. All these methods willdecrease the Inventory Turnover Days and improve the Finish Goods On Time Delivery Rate.Through setup more reasonable Order Forecast Model, the Order ForecastAccurate Rate willbe improved for the company’s main products.