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INTRODUCTION
DEFINATION AND MEANING
Inventory is a list of goods and materials, or those goods and materials
themselves, held available in stock by a business. Inventory are held in order to
manage and hide from the customer the fact that manufacture/supply delay is
longer than delivery delay, and also to ease the effect of imperfections In the
manufacturing process that lower production efficiencies if production capacity
stands idle for lack of materials.
Inventory management is primarily about specifying the size and placement of
stocked goods. Inventory management is required at different locations within a
facility or within multiple locations of a supply network to protect the regular and
planned course of production against the random disturbance of the scope of
inventory management also concerns the fine lines between replenishment lead
time, carrying costs of inventory, asset management, inventory forecasting,
inventory valuation, inventory visibility, future inventory price forecasting,
physical inventory, available physical space for inventory, quality management,
replenishment, returns and defective goods and demand forecasting and also by
replenishment Or can be defined as the left out stock of any item used in an
organization. running out of materials or goods.
Any organization which is into production, trading, sale and service of a product
will necessarily hold stock of various physical resources to aid in future
consumption and sale. While inventory is a necessary evil of any such business,
it may be noted that the organizations hold inventories for various reasons,
which include speculative purposes, functional purposes, physical necessities
etc.
From the above definition the following points stand out with reference to
inventory:
Buffer stock
Overproduction
is held because the forecast and the actual sales did not
match. Making to order and JIT eliminates this stock type.
Changeover stock
flow is owned by a single firm and those where each channel member operates
independently. Therefore coordination between the various players in the chain is
key in its effective management. Cooper and Ell ram [1993] compare supply
chain management to a well-balanced and well-practiced relay team. Such a
team is more competitive when each player knows how to be positioned for the
hand-off. The relationships are the strongest between players who directly pass
the baton (stick), but the entire team needs to make a coordinated effort to win
the race. Below is an example of a very simple supply chain for a single product,
where raw material is procured from vendors, transformed into finished goods in
a single step, and then transported to distribution centres, and ultimately,
customers .Realistic supply chains have multiple end products with shared
components, facilities and capacities. The flow of materials is not always along
an arborescent network, various modes of transportation may be considered,
and the bill of materials for the end items may be both deep and large.
To simplify the concept, supply chain management can be defined as a loop: it
starts with the customer and ends with the customer. All materials, finished
products, information, and even all transactions flow through the loop. However,
supply chain management can be a very difficult task because in the reality, the
supply chain is a complex and dynamic network of facilities and organizations
with different, conflicting objectives.
Supply chains exist in both service and manufacturing organizations, although
the complexity of the chain may vary greatly from industry to industry and firm
to firm.
(2001)
Supply Chain Management is a systems approach to managing the entire flow
of information, materials, and services from raw materials suppliers through
factories and warehouses to the end customer. Supply chain event
management(abbreviated as SCEM) is a consideration of all possible occurring
events and factors that can cause a disruption in a supply chain. With SCEM
possible scenarios can be created and solutions can be planned