Material Management Optimization For Company D

As the competition of the market is being fierce increasingly,optimizing the supply chain,reducing inventory and cost have become the highest priority issues faced by many companies.Currently,it is common that enterprises have issues such as high inventory,funds tied up and complex management.Many enterprises are interested in using supply chain management tools to help improving inventory management and to reducing costs.This thesis analyzes the current situation of supply chain management and inventory management of company D based on summarizing the relevant theories of supply chain management and inventory management.It investigates the problems existing in company D,such as high cost for daily procurement based on multi-suppliers,high inventory and disordered material management.Based on classifying the materials through ABC method,it is found that C materials have the characteristics of high variety,low value,huge number of suppliers,and lack of leverage power during negotiation,which are consuming too much energy of purchasing and logistic departments.Thus the thesis points out that supplier optimization and consolidation can help to reduce supplier quantity and improve efficiency.Furthermore,steps of VMI implementation are analyzed: business process reengineering is used to change the process from ERP to VMI;Two bin method is used to reduce the inventory in company D and trigger the order points;vending machine is used for personal protect equipment issuing which also reduce the consumption of personal protect equipment;Min-Max method is used to define the reasonable inventory level and order quantity at a certain service level.Finally,quantitative and qualitative analysis shows that supplier optimization,consolidation and VMI solution can optimize the supply chain management and improve the inventory turnover.The research results can be referenced by similar companies for purchasing and inventory management.