AB Cosmetic Packaging Company Excess Inventory Management Study

With the continuous development of cosmetics packaging industry market size,more and more products are sold in market,including online and offline channels,along with the market expansion,it has led to a lot of capital and new companies in different industries to join into the cosmetics packaging industry competition.However,some different background companies joined into the competition even there is no enough cosmetic industry experience or good technology capability,in order to meet the needs of customers,they often build stock to shorten the delivery lead time.Thereafter,demand changed over time,it brought to cosmetics packaging enterprise many dead stock and the issue cannot be effectively solved.Shanghai AB company is a collective enterprise based in France,and it belongs to the cosmetic packaging industry,also facing high excess inventory problems in past few years,according to the situation of AB company,this article learn through the company’s products,processes,organizational structure and demand management process,etc.,and draw the pareto diagram through the historical inventory data analysis and find out the two main reasons of excess inventory,one is lack of customer demand management system and the other one is due to unreasonable production schedule management.To solve the excess inventory issue:Firstly,ABC customer classification management is established and it could distinguish ABC class customers and make inventory management strategy according to different customers.At the same time,Leveraging S&OP sales and operation management,to increase the ability of mid-and long-term planning for demand,supply and inventory plan.Secondly,Introducing Pull production planning schedule into AB company from the perspective of lean production and changing the production scheduling mode from push to pull.Production plan is arranged according to customer needs to reduce inventory waste in the production process.Finally,Safeguard measures are implemented to reduce the excess inventory.It includes 4 measures.Firstly,strengthening the construction of lean thinking,improve the lean thinking concept of all staff.Secondly,optimizing the Supply chain organization,adding the demand management role and production planning role.Thirdly,establish the responsibility system for the excess inventory,Finally,building early warning system to prevent the excess inventory.By solving the problem of AB company’s excess inventory,this research will uplift the AB company’s lean inventory management and improves the enterprise’s financial level.And It can provide the reference to same industry other companies in excess inventory reduction through using of ABC customer classification,S&OP medium and long-term inventory management method and lean production scheduling to solve the excess inventory.