How Do Organizations Use Supply Management?

Tying up too much capital in products that are not in demand could be a fatal mistake for struggling small businesses. Moreover, Inventory management can mean the difference between success and failure for some companies. According to the New York Times article, Macy’s was able to post a profit last quarter thanks in large part to improvements it made to its inventory management system. In spite of the unstable economic conditions and the huge competition in the market such as J.C Penny and Kohl’s, Macy’s was able to get market share and raise their profit. In this paper, I will be briefly discussing the inventory management history at Macy’s and how the changes in inventory management helped the

(i.e. products that they get to order only once because of long supplier lead times). First they determine a forecast for an item and then they have a process for converting that forecast into an order quantity.

During the game, I realized that wide gaps in orders of every role in the supply chain such as factory, distributor and retailer create inventory management challenges. For example, distributor records 0units between week1-week 4 compared to retailer within the same period. The retailer records 3units, 5units, 2units and 2units between weeks 1- week 4. The same applies to factory with 0units from weeks 2-4. Addressing inventory management problems requires developing an average unit level to avoid disappointing customers when demand

The customers, wholesalers and retailers may order in large quantities with the expectation that they will receive a greater allocation of products that are in short supply. The impact on the supply chain is significant as the forecasted demand is greatly, and unrealistically, increased with these inflated orders. Eventually orders disappear and cancellations pour in, making it impossible for the manufacturer to determine the real demand for its products

Planning and Forecasting is a vital function of management especially as it is related to inventory management. Planning has four processes associated with it. They are establishing goals, formulating strategies, implementing the plan and evaluating its success. The planning process of inventory will assist the organization choose the correct inventory system resulting in reduced costs and increased efficiency. For any business, having large amounts of inventory could prove to be expensive. In most company’s the management team will forecast sales on a monthly basis in order to keep enough inventories to fill customer orders in a timely fashion but not have an overflow of stock. There are various types of

The allocation of capacity among our suppliers was mainly due to the lead times and unit costs. We placed a larger order with Far Far Away in January because the lead time was four months and we would have received it by the time the sales season started in May. The unit costs were also cheaper which meant we could order more. We placed a smaller order with Pretty Close in April due to the zero month lead time, and the unit cost was more expensive. In the last two years we decided to adjust the order capacity for each model depending on if we overstocked or understocked in the previous year. We ordered less of the product from Pretty Close so we could have more capacity to order more or less if need be after we ordered the production

Inventory control and management is usually the last thing that is on the mind of independent practice owners. However, failure to properly take care of inventory will result in operational problems and poor customer satisfaction.

Tasks:  What should Alison do? o Develop plans to improve the inventory management o Develop time-based supply strategies to bring competitive advantages to the organization  Identify the functions and forms of inventory  What are alternatives for inventory management? o ABC classification o Supplier-managed inventories (SMI) o Just-on-time or Just-in-time (JIT) o Enhance the forecasting system (factor correlated with inventory variation)  Provide training programs for current and new hiring employees 1

The games main role is to focus on the importance of communication among the different levels of the supply chain. Without communication among the team members, the only option is to guess what the intentions of the retailer, distributor, or wholesaler are. Without communication, you do not know what each supply chain members thought process is. So what you end up with is wild fluctuations of inventory you have or don’t have on hand (this completely dispels any attempt at “Just In Time Delivery”).

Forecasting One of the big threats Wegmans has to be aware of within the supermarket industry is something referred to as the “newsvendor problem”. The newsvendor problem refers to a situation where final demand at the retail level is unknown and any units that are ordered then unsold lose value. This particular problem is associated with most, if not all, industries involving food because demand is often uncertain and food will lose its value once it has expired or gone bad. However, an idea to avoid this problem would be to order less of products in hopes of having fewer inventories left on the shelves to go bad. Unfortunately this route may result in shortages and angered customers. So how is this issue solved? Wegmans decided to address this particular dilemma by implementing a business intelligence (BI) system that has aided in their forecasting process. (Stevenson) In addition to aiding in the inventory

Supply Chain Management plays a vital role in our hospitals today. With the growing cost of healthcare and new technologies, it is vital for hospitals to run as efficiently as possible and without jeopardizing care. To the materials manager and to the financial minds of a hospital the area of supply chain is a tedius task at best, the kind of planning, strategizing and measuring that seldom goes recognized and rewarded. The work involved with inventory control fits tightly within that description.

Managing what's in a warehouse or on the shop floor can be extremely complex if you're looking for optimal cost and supply chain management capabilities( Needleman, 2017 ). Inventory estimation and control is directly impacted a company’s profitability.

Forecasting is a method of extrapolation of quantitative and qualitative data to predict future requirements. Qualitative forecasting is subjective, whereas quantitative forecasting contains projection of historical data. Simply stated, forecasting is a technique utilized in efforts to match supply with demand. Accurate forecasts are necessary throughout the supply chain to guide decisions regarding operation activities. “Poor forecasting can result in poor inventory and staffing decisions, resulting in part shortages, inadequate customer service, and many customer complaints” (Collier & Evans, 2013, pg.227). Poor forecasting can also result in excess inventory throughout the supply chain. Since forecasting is such an integeral component of the value chain, it stands to reason that inadequate forecasting could be the basis for the various quality control issues General Motors has experienced within its supply chain.

All organizations that supply goods or services to another business or consumer look at demand forecasting for planning purposes. Young (2010) stated for most organizations, the marketing department will forecast the demand for both the short and long term planning and the operations department will work closely to set a production forecast based on these demands. When forecasting, organizations must take into consideration all the possible factors that will affect the supply/demand. These factors include trends, seasonality, competitive pricing, sudden changes in demand, economic conditions, labor and strikes, and more. In today’s business world, forecasting is not just a necessity, but also a means of survival, which is why predicting the future, is so important for the short and long-term success of an organization. As the northeast vice president of operations for McDonalds, I have the complex and challenging role of ensuring accurate forecast are submitted for the internal and external demand for our products.

Each department’s purchases of goods for consumption or resale may represent inventory. Departments that hold inventory