Research On Finished Goods Inventory Optimization Of AJ Company

Nowadays the macroeconomic environment is basically stable,but global economic growth has slowed down,The geopolitical factors have increased their adverse impact on the economy.International trade keep growth,but trade frictions and disputes are on the rising,also for trade protectionism.Cold bending profile industry in Europe and U.S developed countries have been fully developed,whose technology is more mature.The industrial fields has been well known and application is also widely.In our country is still in its beginning stage,The technology needs to be constantly improved and accumulated,its application field is also limited.Also the market share is relatively small.Inventory is an essential part of the production and operation process.No matter what type of enterprise,the inventory has various types,Which occupies a considerable proportion in the current assets.Therefore,whether the inventory management is perfect or not is directly related to the level of enterprise capital occupation and asset operation efficiency,reflects the comprehensive level of enterprise income,risk and liquidity,even determines the future and the fate of the enterprise.AJ company was invested by one Europe multinational company,which located in Suzhou industrial park of China.The company is mainly engaged in customized steel aluminum cold bending profile design and processing.Its products in addition to meet the increasing market of China,also for exporting to Asia Pacific,Europe and U.S market.With the growing domestic cold bending industry market,Through using of foreign advanced technology to ensure good quality,The company have to increase the competitiveness of products,enhance the advantage of supply chain,reduce inventory carrying costs.This paper is to study AJ company’ inventory management status,mainly focus on the steel profiles finished products.Through the tool of questionnaire survey,on-site investigation and depth interview with top management leader and inventory managing team.Finally concluded three main problems for finished products: inventory volume proportion is much high,slow moving and obsolete inventory,inventory structure is not very reasonable.Then the fishbone diagram is used to analyze the causes of these problems from the aspects of human,machine,material and method,so can be for the direction of subsequent optimization.Through looking for inventory management relevant literature,there are many methods and tools can be applied for inventories controlling.This paper focus on finished goods inventory reduction and optimization research.Firstly,based on its existing extensive customers,the industry ranking is made according to the sales proportion.Then to carry out ABC classification according to the production mode adopted by the industry.The result is nearly 80% of the customers are stock production according to the forecast.On this basis,the main customer from related industry with different characteristics to apply for the corresponding demand forecasting methods are adopted respectively.Meanwhile the Lean management theory was introduced,and JIT inventory control was carried out.In order to improve the coordination of the planning,the S&OP theory was applied to sales and operation.Strengthen the management of MRB and stagnant products.The optimization is on the premise of guarantee the OTD,effectively reduce the inventory level,improve inventory turnover,reach financial assessment KPI target of the multinational company.Finally,with some necessary actions such as organization,capital,IT,culture to be carried out and ensure the implementation of the optimization.