Research On Inventory Management Optimization Of J Company

We are stepping into a new Era which is characterized by economic globalization,Mass customization,trade war between China and US,Intelligent Manufacturing,China 20205 Industry 4.0 strategy,Demographic Dividend reduction in China,ect.Under this macro environment,there are more and more oversea manufacturing enterprise plan to moved to the countries who has lower labor cost,such as Vietnam,India,Malaysia,Mexico etc.We are in the fast-changing era of Technology,Economy,Politics and Culture.The macro environment brings up increasingly more and more uncertainties to enterprise's development.J company showing in this article is also not an exception.J company is an un American multinational OEM company which was founded in 1996 with 5 manufacturing sites in China.J company mainly produced PCB(Printed Circuit Board)across a broad range of industries,Automotive industry,Medical appliances,Aerospace appliances etc,it also provides packing solutions to customers.As of now,Trade war has impact around 40% of J company revenue,some of customer is considering to remove Business to other sites.Meanwhile,many uncertain factors such as uncertainty of both customer demand and supply market,customization,and Personalization are forcing China Manufacturing to have more cost advantages,more cash flow and more flexible and effective operational management to satisfy or even to exceed customer's expectation to fight for more market shares in the fierce torrent of competition.To cope and win,excellent operational management is an imperative factor to increase enterprise core competency and to increase customer's clinginess.This article take inventory management of J company U group as a research object,analyzing inventory management tool from theoretical aspect.Such as definition and classification of inventory.Also illustrating inventory management method which include demand forecasting model,safety stock,Vendor Management etc.Then followed by thorough understanding of operational process and inventory management mode of U group.Next,this article find the root cause of low inventory turn over rate which mainly caused by below three reasons: no demand forecasting mechanism and review process;setting buffer stock base on human experience but not using scientific method;no strong partnership with suppliers.Lastly,this article proposed countermeasures accordingly,like introduce demand forecasting model and set task force team to review model's correctness on regular basis;set safety stock using formula,establish good partnership with suppliers by pushing VMI..In parallel,this article evaluated countermeasures' effectiveness in the last sectionThis article provide guidance other peer companies on inventory management through detailed inventory management study of U group,this countersue do bring improvements to U group.Carrying out the inventory optimization plan help U group to improve inventory turn over rate and cash flow which is meaningful and insightful to other manufacturing companies.