Aging Inventory Resolution Analysis Of Company A

High level inventory or aging inventory issue is a common issue for all the company.It will impact the daily operation.It will increase inventory management cost,as well as slow down the cash flow turn-over.How to resolve the issue,is one of the big challenges of management.In the past,researchers were focus on the inventory issue in manufacturing company.But now,I will take the trading company as the subject of researching.Compared to manufacturing company,trading company has its own character.It is without any manufacturing process and all the inventory are shipped from its vendors.When I study the inventory management of trading company,I would like to start with the supply chain process.It will bring me good points to root out the inventory issue and find the solutions.My paper is to study the aging inventory issue of Company A.Company A is a trading company of electronic components.According to the sales territories,it is divided to US,Europe and Asia Pacific.But in my paper,I will study the Asia Pacific business only.At the beginning of my paper,I analyzed the Aging and Inventory Turnover of the top 3 line cards.Then I had an interview with management team and asset operating users to identify the root cause of inventory issues.To conclude the interview result,the root causes of aging inventory are too much forecast orders,supply chain calculation issues,too much asset spec buy orders,supplier lead time issues,demand order changes issues and inventory liabilities issues.To resolve this issues,we should make a good rule of inventory liabilities,optimize the system planning program,the internal and external supply chain process.