Answered: he directors have asked for your advice…

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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Question

“oh fada” receives supplies from a wide range of suppliers directly and adds value by breaking down bulk, customising certain items, and holding stocks until customers require them. The number of inflows of various ranges of goods serving the same purpose has begun to increase with several large amounts laying ideal in warehouse and threatening to become obsolete and also adding up unnecessary cost. The coding system does not allow for ease of identification of the products and wrong item are often picked as the difference between the right and wrong item can be just one digit. Orders are received by telephone and there is no provision for electronic ordering. The stock coding system is a sequential one and has contributed to several issues including inaccurate order entry as it is not possible to find the product details from the codes in use. The products for the orders are manually picked by a team, stock records is done manually with a lot of errors and does not update stock records in real time so the stock data is always different from physical stock, as it provides the information in paper form. In addition any stock that has been put into a storage trailer is not recorded on the system, but is recorded manually. The system is not directly linked to the retail computers and so cannot receive real time information on sales instead the retail orders are copied across to the warehouse computer on a nightly basis. As a consequence the information on stock locations is often out of date. The warehouse operations record transactions by keying them into the computer. There has been limited development in information technology (IT) at the company in the last years. The current information technology (IT) system for the warehouse is old. The company are apparently in contradictory position of various pitfalls in managing its inventory. Task: The directors have asked for your advice from your view point as a professional on issues relating to the various pitfalls confronting “oh fada”.

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