The Inventory Management Of ABB Group Shanghai Plant

With the global financial crisis occurrence of2008, the market demand is very weak in Europe and North American market which were the two engines of worldwide economy development previously. In this background, how to survive and develop becomes a very important topic for the enterprise of manufacture. Cost control is significant method to fight with this challenge. In all of the method, inventory cost control is an important tool. ABB Group Shanghai Plant is facing with the same challenge. On the one hand, in order to meet the more and more shorter lead time and multiple requirements, ABB has to prepare a lot of stock in advance. On the other hand, huge volume inventory big effect the operation and profit of ABB. In traditional practice, inventory control was always focused on internal, but it is outdated. Currently inventory control must be put on the view of supply chain, and then could help enterprise to grab more cost saving.From the view of supply chain, this paper studies the current situation and problem of inventory control of ABB Group Shanghai Plant. And propose to implement Vendor Management Inventory to reduce inventory level and increase profit under the theory of Lean Production and Supply Chain Management. Base on the proposal, the paper analyses the raw material stock and classifies the parts by ABC-XYZ Analysis, to identify the part list which to fit for implementation of VMI. Then to create an achievable VMI implement plan, and provide estimated cost saving. It is meaningful for inventory control of ABB Group Shanghai Plant and same with other manufacture enterprise.