Research On Inventory Optimization Of Valve Factory A With Six Sigma

The inventory management was a core of production and operation management of an enterprise. To some extent, inventory has played an important role to maintain the stability of a manufacturing operation. Especially for a manufacturing enterprise, scientific and proper inventory management methods could greatly enhance the rate of inventory turnover and asset turnover, thusly significantly improving economic efficiency of enterprises.Firstly, this dissertation made an overview of Six Sigma related knowledge, containing its origin, development, applications in overseas and China and the method of DMAIC, namely improvement act of Six Sigma theory, and its implementation tools. Then the author used Six Sigma theory and method to do an empirical research to the inventory management of Valve Factory A. First of all, according to DMAIC method, the author defined and measured the production processes and management of it, clarifying the valve factory production process, including raw material procurement, vendor management, production quality control, customer management and so on. Then followed by analysis tools,such as BS, fishbone diagram and Function Deployment matrix of quantitative methods and other related analysis, the Six Sigma management group identified three main factors affecting inventory: raw material sourcing and supplier management, production planning and quality control, sales management and customer management. On this basis, the group carried out a detailed analysis for the three subprojects and then put forward improvement measures. The purchasing process of raw materials is improved by making a clear information flow through the feedback process, adding a credit evaluation link and building standard inventory quantity. Then the group pointed out that finished welded in-process inventory storage was too excessive through relevant quantitative analysis method, so the group established relevant models and made production planning refined, thus increasing yields and production cycle. Finally, the group re-built sales management process, such as adding a customer management system to boost orders for production planning, speeding up reimbursement plans and cash flow, and setting customer credit records, to prevent deceiving goods incidents.In the control approach, the group established or improved the related processes for the three sub-projects, and clarifyresponsibilitiesof the position. At last,in effect evaluation stage, the paper verified the project results through comparing the number of inventory before and after the project. The data suggested thatthat the inventory of A factory reduced from 3.5 million Yuan to 2.8 million Yuan, a decrease of 20%.