Concept Paper on Inventory Control

Quality, production times, distribution of items and final prices will brand you as a successful company, using some key management components can get you to that level. This concept paper is going to focus on production planning, developing a master production schedule, capacity planning, inventory management and total quality management. Each of the topics is crucial in materials management and whether the company is going to flourish or fall. The examples used are going to help bring an understanding on how each phase is important to each other. No manufacturing or service industry can be productive without a sound production plan. Effective planning is fundamental in any business; it’s a complex process that covers a wide variety of activities that ensure that materials, equipment and human resources are available to complete the work. Think of production planning as a road map; it helps you know where you are going, and how long it will take to get to your final destination. To plan effectively you will need to estimate potential sales with some reliability. Most businesses do not have firm sales or service figures; however, they can forecast sales based on historical information and market trends. Initially the plan needs to address specific key elements well in advance of production on order to ensure an uninterrupted flow of work as it unfolds. Material ordering, equipment procurement, bottlenecks and human resources acquisitions and training are some of these elements. Production planning needs to be done on several time scales; Long-range is plans for a five year term, Medium-range are made for two months to a year, and Short-range is no more than two months. Some basic strategies used to supplement these time scales are chase strategy, production leveling, subcontracting, and the hybrid strategy. Chase strategy is producing the amounts demanded at any given time. Inventory levels remain stable while production varies to meet demand.