Report on Case study of ABC Analysis - A Case Study of Vehicle Spare Parts Based on Deccan Vehicles

 

Report on Case study of ABC Analysis - A Case Study of Vehicle Spare Parts Based on Deccan Vehicles

Step 1.

Some of the key information essentially that has been used in the case study are listing the inventory used during a production cycle along with it cost per unit, Annual Units utilize, Annual Usage Value. These are the essential information required to perform the ABC Analysis.

Step 2.

Some of the key issue in inventory management that this industry is likely to face are as followed;

§  Overreliance on Automation:
Technology alone cannot plan inventory. According to Outcalt, “there’s this illusion that computers and POS systems are supplanting sound inventory planning training or taking care of planning. POS systems, like accounting systems, are historians. They show to the penny what has happened already. But how do you project forward? What’s your profit plan for the year? What’s your buying plan for the year? For a lot of retailers, it’s like driving down the freeway at 65 miles an hour with the headlights out. Would you do that? No. But that’s how they’re driving their businesses, barreling along. They need the plan to be able to look ahead and see how to adjust.”

§  Multi-channel Warehousing:
Organizations frequently pull inventory from multiple locations, such as brick-and-mortar stores, distributions centers or warehouses. Tracking diverse sources adds complexity to both inventory management and order fulfillment. Fulfilling orders from diverse locations increases shipping costs, frustrating waiting customers.

§  Limited Cycle Counts:
With an annual cycle count, you reduce effectiveness because it usually means shutting operations for at least a day. You can take a more manageable and informative approach with frequent counts on select inventory.

§  Poor Picking Process:
With an inefficient arrangement of stock, you reduce productivity. Consider how far items must travel from inventory to the retail space or production floor. Place frequently requested items in areas for quick retrieval.

 

Step 3

Some of the actions that the organization can tack up to solve the above problams are as followed:

1.     Centralized Tracking:

Consider upgrading to tracking software that provides automated features for re-ordering and procurement. Inventory management platforms provide centralized, cloud-based databases for accurate, automatic inventory updates and real-time data backup.

2.     Stock Auditing:

Frequent stock auditing processes, like daily cycle counting, reduce human error and provide more accurate, up-to-date inventory data for managing cash flow Organize audits by category and cycle count smaller inventory on a predictable schedule for more accurate financial data.

 

 

3.     Demand Forecasting:

Some inventory management platforms include demand forecasting tools. This feature integrates with accounting and sales data to help you predict demand and schedule orders based on shifting customer preferences, material availability or seasonal trends.

4.     Preventive Control:

 

Implement stock control systems to manage problem inventory, such as perishable stock, fragile equipment or obsolete materials. Perform regular preventive maintenance on machinery and equipment stock in storage if required by the manufacturer. Catalog data on problem stock location, cost and quantity to monitor shelf life and prevent waste.

 

5.     Optimize Space:

 

Use inventory management systems with warehouse management features to optimize storage space and inventory flow. Categorize inventory storage down to shelf, bin and compartment, and automate order picking, packing and shipping workflows.

 

Step 4

 

From all the alternative Above solution the best that I would like to introduce or recommend to the organization is By Optimizing Warehouse space and secondly by implementing cartelized tracking system .

 

 

 

 

 

 

Courtesy 1. https://www.netsuite.com/portal/resource/articles/inventory-management/inventory-management-challenges.shtml

2. https://magenest.com/en/inventory-management-challenges/

All information is adopted from the above source, Content credit to the respective creator.

 

 

 

 

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