Ymontiara Jones-Week 9 Assignment Fleshing Out Your Proposal

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1 Week 9 Assignment Ymontiara Jones ENG 201 Professor Dr. K June 4, 2023

2 Introduction Production and inventory control will determine how the customer views a company; better product quality, cost, and delivery will improve availability by managing inventory. Cycle counting is an innovative technique that allows all aspects of the distribution center to manage accuracy. The role of management is to identify and improve procedures. Managers of Nike Inc. should conduct an annual cycle count before the end of the fiscal year to understand stock trends, First In, First Out (FIFO), and product demand forecasting. Problem Challenges that arise within inventory management are having too much inventory and not allocating orders for sales, not having enough merchandise to fulfill orders with customers canceling orders, and not understanding what you have on hand could be due to theft or loss of product. Inventory credibility is essential to the main reason of this is because customers are critical to the growth of your business. Keeping track of supplies and products can determine prices. Without sacrificing customer experience or product quality, it will also help manage sudden changes in demand. "Poor customer service will result in delayed product shipments to customers. With inadequate inventory, it can be very costly to the organization. Lastly, businesses track lists to fulfill customers' orders; knowing your capability to have a satisfied customer is essential" (Stevens, 1). Business leaders practicing inventory management help understand the stock on hand and how to identify if there is a shortage. Without efficient inventory management, it is easy to lose track of stock availability levels. The accuracy of product orders and tracking is critical to good inventory management. Effective fulfillment distribution centers will offer software that shows real-time and systems in place to ensure every product is accounted for throughout the fulfillment process. "From 2016 to 2017, 25% more retailers and manufacturers invested in better warehouse management technology. Half of the organizations surveyed reinvest in technology to drive better distribution center technology" (Stevens, 1). Effective inventory management allows companies to fulfill orders on time and accurately. Solution A fiscal year is essential to any business; imagine finding extra money within the company, which can positively contribute to profit margins. Cycle counting is a method companies use to confirm physical inventory counts to match inventory methods. Warehouse management prepares a plan for staff to audit inventory using whichever software of their choice that they use on a daily operations basis to make needed adjustments. "For example, even though many major companies use inventory management software and other systems to track inventory throughout

3 the year, the actual count can reveal what you have on hand to ensure that physical and systemic counts are aligned" (Michel, 2). The year-end count is crucial because it ensures that the stock on hand matches records. By getting insight into the active inventory, the company can comply with tax requirements, manage audits, and offer accurate data to the finance team. Resources that would help this solution would be implementing a warehouse management system. First, a warehouse management system can benefit from efficiency, lower error rates, and reduced training costs; this can help optimize stock flow. Effective operations management systems can increase operational efficiency and reduce costs while boosting customer satisfaction. "Purchasing a warehouse management system is one of the essential purchases; everything else can be tracked, from productivity to shipping cost needs. An effective inventory management system must track purchasing, warehousing, sales order fulfillment, distribution, and customer service management. Track various costs of materials based on the purchasing cost, inventory carrying cost, transportation cost, material handling cost, office cost, packing cost, marketing cost, obsolescence, and wastage efficiently manages all aspects of the business needs" (Stevens, 1). Funding warehouse software will remove errors when employees perform cycle counts to ensure that physical and systematic add up. Risk There are potential conflicts of housing overstock inventory within the business, such as trouble selling products later if there is reduced demand. "Overstocking is when the business has excessive inventory than it can sell. Inventory overstock can tie up cash and prevent a business from being able to invest in other areas of the company. This risk can also lead to spoilage if you have perishable items on your inventory list" (Reiff, 3). The cost to store surplus stock is one significant downside of overstocking. Warehousing costs are costly, and renting a warehouse or storage space can get expensive. Still, the cost of labor to manage a business's warehousing operations will also be expensive. Inventory is purchased to be sold for profit, but excess inventory on hand can result in capital being tied up. Stock loses value over time as degradation occurs, leading to an eventual loss of revenue. "Overstocking is a nightmare for many companies, and it can cost them hundreds of thousands annually. Excess inventory can lead to reduced profit margins in many examples. Companies typically put extra items on clearance to induce buyers to purchase them at a lower cost to get rid of merchandise" (Reiff, 3). Focusing on efforts to maximize storage within the warehouse is essential, to inventory audits should be conducted regularly to correct inaccurate stock records that can lead to overstock and understocking scenarios. Benefits

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