Inventory management is proper supervision of different stock as well as assets items. Inventory is the idle stock of goods of a respective company that holds economic value that can be held in different forms in the packaging as well as processing or sale in the near future. The report is based on Woolworths Company based in Australia wherein proper inventory management has to be maintained by them in order to oversee the storage as well as production of different food items in the respective company (Woolworths.com.au, 2017).
The main aim and purpose of the assignment is to analyze the importance of the inventory as well as operations management in Woolworths Company. As Woolworth is a supermarket in Australia, it is essential for the company to understand the requirement of inventory management and analyzing the ways to increase the profit of the company. The purpose of the assignment is to understand the process through which the company can understand the levels of inventory that is required to be maintained by the company.
The structure of the assignment includes analyzing the importance of inventory management in different companies. The strategies is required to be adopted by the organization has to be explained properly in order to generate profitability in the competitive market.
Woolworths Supermarket is the largest organization across Australia and it has more than 900 stores in Australia as well. As Woolworths is a supermarket, proper inventory is required to be maintained by the company as to have proper understanding about the economic value of the goods and evaluating the external and internal factors through proper review and planning (Govindan, Soleimani and Kannan 2015). The inventory management plays a vital role in the supermarkets as this helps in understanding the purpose of maintaining inventory of the goods and services (Fleischmann, Meyr and Wagner 2015). Woolworths need to maintain inventory management in the organization as this will help in understanding the requirement of units of various products that has to be ordered by the specific departments as well as the period to order the products along with the discounts that can be gained from ordering various products in lot (Costantino, Di Gravio and Tronci 2013).
According to Sundar, Balaji and Kumar (2014), there are various effects along with discounts that can be used by Woolworths in Australia as this can help in analyzing the needs of the customers. The bullwhip effect can be adopted by Woolworths supermarket as it helps in providing higher safety of the stocks and are stored properly in the store itself. However, Woolworths deals with different sale of items that are seasonal in nature and it does not require to be kept in inventory for the entire year by the company. However, Jaber (2016), proper inventory needs to be set up by Woolworths as it helps in price discounts that are offered by the company in the various seasons. Inventory management will provide proper independence among different stages as to avoid stoppages in work and work in progress inventories has to be kept by the Woolworths supermarket as to analyze the issues that can be faced by them in maintaining the inventory (Bozorgi-Amiri, Jabalameli and Al-e-Hashem 2013).
According to Johnson (2014), dependent demands are used in order to understand the different kinds of demand for the production of the final goods and services. It can be properly utilized by Woolworths supermarket as to analyze the demand for the products that needs to be properly kept in inventory for future purpose. On the other hand Stadtler (2015), proper demand that is helpful in analysis of the demands of the external customers are independent demand.
Woolworths supermarket needs to understand the tastes and preferences of the customers in order to provide them with accurate and proper quality of goods and services as this will help in gaining competitive advantage in the market. The inventory has to be sufficient in nature as to provide the customers’ quality service as this will help them in maintaining proper quality of goods and services in the future. The costs of inventory needs to be analyzed properly by the respective company as to identify the different kind of costs namely carrying, ordering and shortage costs (Baños-Caballero, García-Teruel and Martínez-Solano 2014).
According to Ho et al. (2015), Woolworth supermarket needs to generate continuous as well as periodic system as this can help in understanding the quantity and period that has to be maintained properly by them. However, on the other hand according to Kwon, Lee and Shin (2014), in continuous system, the amount of orders remains constant and the situation demands that proper level has to be predetermined by the company as to understand the quantity of orders that has to be placed for order. On the other hand, periodic system will help Woolworths supermarket in understanding the kind of orders that has to be placed within a fixed frame of time.
Shortcomings of Inventory Management
According to Ho et al. (2015), proper actions has to be taken by the officials of the company by saving cost along with saving time, as this will help the entire company in reducing the issues that are faced by the employees and the company as well. However, according to Baños-Caballero, García-Teruel and Martínez-Solano (2014), proper strategies relating to the system of the inventory is to be taken as this will help in understanding the issues and solving it accordingly.
The fast moving goods inventory management is been in trend and it is used by Woolworths supermarket as it will help in understanding the total orders that are been made and the time for delivery as well.
Woolworths supermarket needs to determine as well as analyze the optimal amount of units that has to be ordered by them. It has to be done by the respective company as to minimize the overall cost that is associated with the overall purchase of goods along with delivery and storage of goods and services (Brandenburg et al. 2014). The economic order quantity has to be properly maintained by Woolworths in order to analyze the production and the quantity of the products that has to be kept in the inventory.
· In the year 2000, proper ERP inventory system was introduced that helped in increasing the efficiency of the organization and saved the cost as well.
Woolworth Supermarket needs to implement ABC analysis, as this will help them in analyzing the inventory into three different categories namely:
According Baghalian, Rezapour and Farahani (2013), ABC analysis helps in identifying the items that needs to be properly taken care of by the different items that are vital, essential as well as desirable in nature. The A items need to have proper tight control as well as it needs to maintain proper records about the various goods and services. Similarly, for B items proper focus has to be provided by the company as to understand the goods that does not need good records in the later stage. However, on the other hand according to Axsäter (2015), for C items are the less important goods that do not need proper storage, minimal records are necessary, and no periodic reviews are required for such items in the market. In order to conduct proper inventory management, proper control is required in order to understand the level of criticality as it requires effective control in such environment.
V: Vital in nature wherein variation as well as substitute gap are not required.
E: Essential in nature that allows the one to get changed either substitute or variation gap.
D: Desirable in nature that allows either of the gaps in one of the parameters.
Conclusion
Therefore, it can be inferred that proper inventory management has to be maintained by Woolworths supermarket for achieving greater performance goals in the organization through proper supply chain and inventory management. The production level has to be properly controlled by the respective company, as this will enhance the level of inventory in order to understand the importance of maintaining inventory in the organization. The operations and inventory management is necessary as to analyze the key decisions that has to be taken by the respective company as to analyze the demand of the customers in the market to check the availability of goods and services from the particular company. With proper usage of inventory management, it will be easier for the organizations to check the required quantity as well as quality along with the price of the products. With proper implementation of inventory and supply chain management, it is essential for the organizations and the employees to be more effective and efficient as well.
References
Ahi, P. and Searcy, C., 2013. A comparative literature analysis of definitions for green and sustainable supply chain management. Journal of Cleaner Production, 52, pp.329-341.
Axsäter, S., 2015. Inventory control (Vol. 225). Springer.
Baghalian, A., Rezapour, S. and Farahani, R.Z., 2013. Robust supply chain network design with service level against disruptions and demand uncertainties: A real-life case. European Journal of Operational Research, 227(1), pp.199-215.
Baños-Caballero, S., García-Teruel, P.J. and Martínez-Solano, P., 2014. Working capital management, corporate performance, and financial constraints. Journal of Business Research, 67(3), pp.332-338.
Bozorgi-Amiri, A., Jabalameli, M.S. and Al-e-Hashem, S.M., 2013. A multi-objective robust stochastic programming model for disaster relief logistics under uncertainty. OR spectrum, 35(4), pp.905-933.
Brandenburg, M., Govindan, K., Sarkis, J. and Seuring, S., 2014. Quantitative models for sustainable supply chain management: Developments and directions. European Journal of Operational Research, 233(2), pp.299-312.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Cohen, M.C., Lobel, R. and Perakis, G., 2015. The impact of demand uncertainty on consumer subsidies for green technology adoption. Management Science, 62(5), pp.1235-1258.
Costantino, F., Di Gravio, G. and Tronci, M., 2013. Multi-echelon, multi-indenture spare parts inventory control subject to system availability and budget constraints. Reliability Engineering & System Safety, 119, pp.95-101.
Fleischmann, B., Meyr, H. and Wagner, M., 2015. Advanced planning. In Supply chain management and advanced planning (pp. 71-95). Springer Berlin Heidelberg.
Govindan, K., Soleimani, H. and Kannan, D., 2015. Reverse logistics and closed-loop supply chain: A comprehensive review to explore the future. European Journal of Operational Research, 240(3), pp.603-626.
Heizer, J., 2016. Operations Management, 11/e. Pearson Education India.
Ho, W., Zheng, T., Yildiz, H. and Talluri, S., 2015. Supply chain risk management: a literature review. International Journal of Production Research, 53(16), pp.5031-5069.
Jaber, M.Y. ed., 2016. Learning curves: Theory, models, and applications. CRC Press.
Johnson, P.F., 2014. Purchasing and supply management. McGraw-Hill Higher Education.
Kwon, O., Lee, N. and Shin, B., 2014. Data quality management, data usage experience and acquisition intention of big data analytics. International Journal of Information Management, 34(3), pp.387-394.
Stadtler, H., 2015. Supply chain management: An overview. In Supply chain management and advanced planning (pp. 3-28). Springer Berlin Heidelberg.
Sundar, R., Balaji, A.N. and Kumar, R.S., 2014. A review on lean manufacturing implementation techniques. Procedia Engineering, 97, pp.1875-1885.
Woolworths.com.au. (2017). {{metaController.metaData.title}}. [online] Available at: https://www.woolworths.com.au/ [Accessed 6 Sep. 2017].
Yang, S.A. and Birge, J.R., 2013. How inventory is (should be) financed: Trade credit in supply chains with demand uncertainty and costs of financial distress.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download