Study On Fujikura Inventory Control Policy And Practice

With the sound development of the market Economy, the competition among companies is becoming fiercer which is changing from the point of cost and quality to the full scale model. Among that inventory control is becoming a very important area in terms of the company’s overall cost control. Higher requirement is raised to them since those companies specialized in harness are facing bigger pressure in terms of the demand uncertainty, customers diversity and shorter product cycle time. Raw material cost exceeds 85% of products overall cost in harness industry. Inventory turnover rate and customers satisfactions have direct link to the company’s overall cost. Therefore, inventory control in harness industry is very important.Fujikura harness is a company specialized in harness industry. In past years, the company has very high inventory value and turnover rate which has brought significant impact to the company’s business. With the stability of the company’s business, this paper has made a study on the company’s inventory control and raised corresponding solutions to existing issues based on the company’s current inventory structure.This paper studies inventory control model and methods and analyzes current situation in combination with Fujikura harness’ s background and furthermore, finds out that the single inventory control method is the root cause to existing issues The company doesn’t differentiate its inventory control methods and doesn’t apply to categorization model on oversea imported material. The basic logic of this paper is that the company needs to apply differentiation method on oversea imported material. Safety-stock model should be implemented for over 8 weeks production cycle and decrease lead time for most material which production cycle is less than 8 weeks in order to have sound inventory control. Finally, this paper provides localization and VMI method to the company’s existing problems in terms of inventory control.On the basis of analysis on the inventory control methods, this paper provides inventory categorization, localization and VMI methods to solve the problem of long inventory turn-over months and expects to provide some experience to similar companies for their reference purpose.