Study On Control Of Supply Chain Inventory Cost Of CNWE BU In Foxconn Group

Nowadays, with the booming of globalization in the world, the competition of communication product markets is fiercer than before. The competition among enterprises has gradually evolved into the competition of supply chains, especially in manufacturing enterprises. In its essence, this competition means inventory cost control, therefore, it’s critical for an enterprise to attach great importance to the inventory cost management, whether its aim is to achieve sustainable management, or to maintain sustainable competitiveness.This paper studied CNWE, Foxconn Technology Group’s main network communication products division, which also faced a very serious situation of inventory management. Supply chain inventory cost made up more than 60% of the overall cost of this company, which often leaded to the plight of cash flow shortage. Based on the situation of fast business expansion, frequent design changes of communications products and other serious conditions, this thesis will undertake the in-depth investigations of current situation of inventory cost control and the existing problems. Fish-bone diagram is used for exploring the causes of high inventory costs. Finally, the three-in-one solution program by integrating system-employees-material is proposed, i.e.:(1) Reorganize supply chain process. Improve the business operation procedure from function-oriented to customer-oriented with the task chain as the main line of business processes, and synchronously improve the information management system in supply chain; (2) Reduce the turnover rate of staff in supply chain. Make improvements on innovation management of recruitment, work post, training and team 4A emotion; (3) Strengthen the professional control of inventory elements. Apply different management approach by classifying, grading and putting targeted emphasis on purchased parts, semi-finished goods and engineering changed material. All these actions will achieve the aim of fundamentally solving the problem of inventory cost control before the process, along the process and after the process.Through the study of CNWE inventory control, we concluded a successful experience of supply chain inventory control in actual operation, which might be used for a reference to large scale manufacturing companies.