A Study Of Material Inventory Optimization For W Company In The Development

The manufacturers in China have developed during the last 30 years with the advantage of low labor cost and resources cost. During the extensive development, there are many problems on the company management, such as the supply chain. A lot of idle material stock exists in the warehouse, which causes the shortage of warehouse space and current capital. This thesis aims to study the issues in supply chain inventory management of W company during the fast development and to establish a scientific method to strengthen the material inventory management ability and reducing the material inventory.Firstly we analyze the current status of material inventory to find the problems and the root causes. Then we use information sharing system and Push-Pull strategy to reduce the risk of “Bullwhip effect”. We also use the ABC classification method and the formula of safety stock to set up the reasonable safety stock. Meanwhile, we outsource the supply chain to transfer some of manufacture process to the supplier in order to reduce the material inventory and to increase the internal production flexibility. Besides these, we set up the strategic alliance with the key suppliers to get more service to optimize the management of material inventory.