An Inventory Management System For A Mass Production Manufacturing Facility

2005 Words9 Pages
An inventory management system, inventory control and inventory accuracy are paramount to a mass production manufacturing facility, especially when multiple part types and multiple product types are being produced. Raw component inventory can account for millions of dollars of an organizations’ cash which is not contributing to profitability until converted to a product and sold. Therefore, it is essential for an organization to have an inventory management system and an inventory control process to account for the value associated with each part and ultimately to return value to the operation. Inventory inaccuracy can negatively impact the performance of the production control system (Chan & Wang, 2014). It is difficult to account for raw materials at every stage of the manufacturing process with complete accuracy, thus an error between the actual inventory level and the supply chain management systems record of inventories cannot be completely avoided. However, when an inaccuracy exists in the raw materials inventory it creates a negative effect on the material requirement planning (MRP) systems. The inaccuracy of the material requirement planning systems has a negative impact on the performance of production planning, scheduling and control, which contributes to a less than optimal production output and potentially to disappointing customers with lack of manufactured goods. In a traditional inventory management system, it is assumed that the raw material stock
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