Scientific Glass Case
Logistics and Supply Chain Management
Contents
Introduction
In the case study of Scientific Glass case, the production, distribution and inventory management systems of the company Scientific Glass case have been discussed. Scientific Glass Inc, is a mid-sized company which was growing at a fast pace. The company is trying to resolve its inventory management issues as it is blocking a lot of working capital hindering the growth and expansion of the organization. This case study critically analysis the various alternatives for improving the inventory management system. The proposed alternatives have been evaluated and a final conclusion has been drawn.
The case analysis has been divided into 3 sections. In the first section the issues that the company is facing have been highlighted. In the second section, the issues have been analysed and finally in the last section the various proposed alternatives have been discussed thus arriving at a conclusion.
Issues
The company was facing some serious inventory and financial issues which was hindering the growth and expansion of the company.
1) The executives had identified a disturbing trend. The inventory balances were increasing substantially, which was blocking the capital required for the growth of the company.
2) The company has exceeded its target debt to capital ratio of 40%.
3) The company was focussing on increasing the customer fill rate to 99% and maintain it at the expense of high inventory levels and thus exhausting the financial resources.
4) The rules with respect to maximum inventory levels were violated by the warehouse managers and sales executives, but no strict action was taken in order to prevent it.
Analysis of the issues
In the year 2008, the company initiated an effort to improve the customer fill rates by placing more products closer to large customer concentrations by increasing the number of warehouses operated by the company. The fill rate of the company at the
Contents
Introduction
In the case study of Scientific Glass case, the production, distribution and inventory management systems of the company Scientific Glass case have been discussed. Scientific Glass Inc, is a mid-sized company which was growing at a fast pace. The company is trying to resolve its inventory management issues as it is blocking a lot of working capital hindering the growth and expansion of the organization. This case study critically analysis the various alternatives for improving the inventory management system. The proposed alternatives have been evaluated and a final conclusion has been drawn.
The case analysis has been divided into 3 sections. In the first section the issues that the company is facing have been highlighted. In the second section, the issues have been analysed and finally in the last section the various proposed alternatives have been discussed thus arriving at a conclusion.
Issues
The company was facing some serious inventory and financial issues which was hindering the growth and expansion of the company.
1) The executives had identified a disturbing trend. The inventory balances were increasing substantially, which was blocking the capital required for the growth of the company.
2) The company has exceeded its target debt to capital ratio of 40%.
3) The company was focussing on increasing the customer fill rate to 99% and maintain it at the expense of high inventory levels and thus exhausting the financial resources.
4) The rules with respect to maximum inventory levels were violated by the warehouse managers and sales executives, but no strict action was taken in order to prevent it.
Analysis of the issues
In the year 2008, the company initiated an effort to improve the customer fill rates by placing more products closer to large customer concentrations by increasing the number of warehouses operated by the company. The fill rate of the company at the