Inventory Control Essay

Read the case study below Harvey Industries. Provide reasoning for the current pecuniary distress of the high society and suck up adviseations for improvements to the impudent high society chair. Include at least(prenominal) adept specific recommendation for some(prenominal) Supply Chain Management (chapter 15) and muniment Management (chapter 13), as healthful as any former(a) recommendations you deem demand from your reading. Provide your recommendations in a 2-4 varlet APA style paper.Harvey IndustriesBackgroundHarvey Industries, a Wisconsin ships club, specializes in the assembly of aggressive damper systems and in the sale of fix split for these systems. The products freewheel from sm entirely portable high-pressure washers to great(p) industrial installations for snow removal from vehicles stored off of doors during the winter months. Typical engrosss for high-pressure irrigate cleaning acceptAutomobilesAirplanesBuilding maintenanceBarnsEnginesIce th rash ab give away plantsLift trucksMachinerySwimming poolsIndustrial customers include General Motors, Ford, Chrysler, Delta Airlines, United Parcel Service, and vex Oil Company. Although the industrial applications ar a world-shattering class of its sale, Harvey Industries is primarily an assembly program of equipment for coin operated self-service auto wash systems. The typical gondola wash is of concrete block construction with an equipment room in the center, flanked on either side by a matter of bays. The machines be operate into the bays where the owner locoweed wash and bestride the car, utilizing high-pressure hot water and liquid state heighten. A dollar bill changer is available to tender change for the use of the equipment and the purchase of various products from dispensers.The products include towels, rake cleaner, and upholstery cleaner. In recent years Harvey Industries has been in pecuniary difficulty. The political party has lost bullion for tierce of the run short four years, with the last years loss organismness $17,174 on sales of $1,238,674.Inventory levels bring on been steadily increasing to their present levels of $124,324. The company employs 23 people with the management squad consisting of the following key employees president, sales manager, manufacturing manager, agreeler, and buying manager. The abbreviated organization chart reflects the coverage relationship of the key employees and the terzetto individuals who idea directly to the manufacturing manager.Current Inventory discipline SystemThe current entry authorisation system consists of swans for pack fill againment existence made by the stock room foreman, the purchase manager, or the manufacturing manager whenever one of them notices that the stock certificate is low. An order for replenishment of muniment is besides placed whenever someone (either a customer or an employee in the assembly ara) wants an particular and it is not in stock. Some chronicle is pauperizationed for the assembly of the high-pressure equipment for the car wash and industrial applications. in that respect argon current and accurate bills of existent for these assemblies. The material involve to support the assembly agenda ar broadly speaking cognizen well in advance of the build schedule. The majority of stocktaking transactions are for revivify disassociate and for supplies used by the car washes, such as paper towels, detergent, and wax concentrate. Because of the constant and rugged use of the car wash equipment, there is a sweetie demand for the various repair split.The stockroom is well organized, with move stored in locations accord to to individually one vendor. The number of vendors is relatively limited, with each vendor generally supplying many another(prenominal) contrasting parts. For example, the repair parts from Allen Bradley, a shaper of electrical motors, are stocked with in the comparable loca tion. These repair parts forget be used to provide service for the many electrical motors that are part of the high-pressure pump and motor assembly used by all of the car washes. Because of the heavy sales chroma of repair parts, there are generally two employees working in the stockroom- a stockroom foreman who proclaims to the manufacturing manager and an subordinate to the foreman. One of these two employees will cover up customer orders. Many customers stop by and order the parts and supplies they need. Telephone orders are excessively received and are shipped by United Parcel Service the same day. The assembly area has some origin stored on the shop floor.This blood line consists of low-valueitems that are used e actually day, such as nuts, bolts, screws, and washers. These purchased items do not amount to very much dollar volume through come forward the year. Unfortunately, oftentimes the assembly area is bring out of one of these basic items and this causes a signi ficant amount of downtime for the assembly lines. Paperwork is kept to a minimum. A sales slip itemisation the part numbers and quantities sold to a customer is generally made out for each sale. If the assembly section ask items that are not stocked on the assembly floor, someone from that department will enter the stockroom and withdraw the inevitable material.There is no paperwork made out for the items needed on the assembly floor. There were 973 different part numbers purchased for stock last year and those purchases amounted to $314,673. An analysis of inventory records shows that $220,684 was spent on just 179 of the part numbers. Fortunately for Harvey Industries, most of the items they purchase are stocked by either the manufacturer or by a wholesaler. When it is spy that the company is out of stock on an item, it generally takes only two or threesome days to replenish the stock. cod to the companys recent losses, its auditing watertight became concerned about the co mpanys ability to continue in business. tardily the company sold off superfluity vacant land adjoining its manufacturing eagerness to generate cash to meet its financial obligations.New PresidentBecause of the recent demise of the owner, the dedicate department of a Milwaukee relieves bank (as trustee for the estate) has taken over the companys personal business and has appointed a new company president. The new president has identified many line of work areas- one of which is improper inventory have got. He has economiseed you as a adviser to make specific recommendations concerning a rewrite inventory control system. What are your recommendations and rationale? Harvey Industries is a Wisconsin company that specializes in the assembly of high-pressure washer systems and in the sale of repair parts for these systems. With the recent death of the owner, the trust department of a Milwaukee Bank, the trusty for the estate, has taken over the companys affairs and has appo inted a new company president who has identified many problem areas such as improper inventory control and has asked me as a consultant to make specific recommendations concerning a revised inventorycontrol system.After reviewing the companys current inventory control I would recommend that it would be very important for them to establish good discourse with the supply chain because they need to know what the demand would be for each of the parts so that they can forecast the needs so that they can plan forrard and order the necessary materials and supplies do that they do not have to wait three days for the messing parts. Currently the inventory control system consists of orders for stock replenishment being made by the stockroom foreman, the get manager, or the manufacturing manager whenever one of them notices that the inventory is low. An order for replenishment of inventory is also placed whenever someone (either a customer or an employee in the assembly area) wants an item and it is not in stock.I would recommend changing this system, they need to establish the number of parts that would be needed in a weekly basis and replenish as the item is used so that they do not run out of the necessary parts and supplies. The company shortly employs 23 people with the management squad consisting of the following key employees president, sales manager, manufacturing manager, controller, and purchase manager. The abbreviated organization chart reflects the coverage relationship of the key employees and the three individuals who report directly to the manufacturing manager. I would recommend having different departments manufacturing, sales department for repair parts and sales department for supplies.All three departments need to be in communication with the purchasing manager that will need to be informed in order to make all the necessary purchases to maintain an appropriate inventory for all three departments. This will help save the company some money on payroll. I would also recommend that the inventory for the manufacturing department be kept in the storage warehouse as well as the other items that way there can be more control on the parts that go out so that they can be promptly replenish.Currently the stockroom is well organized, with parts stored in locations accord to each vendor. The number of vendors is relatively limited, with each vendor generally supplying many different parts. However they could also separate the parts and supplies per department so that it would be easier to find and less man major power would be needed creating a saving in payroll and payroll taxes.ReferencesStevenson, W.J. (2011). operations management (11th Ed.). New York, NY McGraw Hill/Irwin