Harvey Industries Essay
Introduction Harvey Industries, a Wisconsin company, is a company that specializes in the assembly of high-pressure washer system and in the sale of repair parts for these systems. In recent years Harvey Industries has been in financial difficulty. The company has lost money for three of the last four years, with the last year’s loss being $17, 174 on sales of $1,238,674. Inventory levels have been steadily increasing to their present levels of $124,324.
Inventory Control System “When planning an approach to inventory management, it is important to bring the internal players in the inventory supply chain together. They should validate what supplies are essential and whether there is a way to reduce some of those costs” (Capko, 2010). The current inventory control “system” consists of orders for stock replenishment being made by the stockroom foreman, the purchasing manager, or the manufacturing manager whenever one of them notices that the inventory is low. Paperwork is kept to a minimum. A sales slip listing the part numbers and quantities sold to a customer is generally made out for each sale. If the assembly department needs items that are not stocked on the assembly floor, someone from that department will enter the stockroom and withdraw the necessary material. There is no paperwork made out for the items needed on the assembly floor. Due to the company’s recent losses, its auditing firm became concerned about the company’s ability to continue in business. The new president has identified many problems areas one of which is improper inventory control. It is my job as a consultant to make recommendations concerning a revised inventory control system.
Recommendations
“Inventory control (also known as inventory management) refers to the systems and strategies businesses use to ensure that they have adequate supplies of raw materials for production and finished goods for shipment to customers, while also minimizing their
Inventory Control System “When planning an approach to inventory management, it is important to bring the internal players in the inventory supply chain together. They should validate what supplies are essential and whether there is a way to reduce some of those costs” (Capko, 2010). The current inventory control “system” consists of orders for stock replenishment being made by the stockroom foreman, the purchasing manager, or the manufacturing manager whenever one of them notices that the inventory is low. Paperwork is kept to a minimum. A sales slip listing the part numbers and quantities sold to a customer is generally made out for each sale. If the assembly department needs items that are not stocked on the assembly floor, someone from that department will enter the stockroom and withdraw the necessary material. There is no paperwork made out for the items needed on the assembly floor. Due to the company’s recent losses, its auditing firm became concerned about the company’s ability to continue in business. The new president has identified many problems areas one of which is improper inventory control. It is my job as a consultant to make recommendations concerning a revised inventory control system.
Recommendations
“Inventory control (also known as inventory management) refers to the systems and strategies businesses use to ensure that they have adequate supplies of raw materials for production and finished goods for shipment to customers, while also minimizing their
References: Capko, J. (2010, March). How to keep inventory costs under control. Urology Times, 38(3), 40. Retrieved June 27, 2010, from ABI/INFORM Trade & Industry. (Document ID: 1996495861). Malonis. J, and Cengage, G. (2000). "Inventory Control Systems." Encyclopedia of Business. Ed. eNotes.com. 2006. 27 Jun, 2010 http://www.enotes.com/biz-encyclopedia/ inventory-control-systems Stevenson, W. (2009). Operations Management, New York: McGraw-Hill Irwin