A collection of resources and commentary providing an introduction to supply chain management and related systems for students, practitioners, and anyone else interested in learning more about how to design, manufacture, transport, store, deliver, and manage products.
Tuesday, February 11, 2014
Too little or too much stock to keep? Inventory Control by Ace Air Conditioning in Lake Charles, LA
This is a hard question that each and every business
operation whether manufacturing or distribution needs to critically think
about. Too little inventory would mean that you won’t have enough to actually satisfy
your customer orders in a timely manner which might result in losing imperative
customers. On the other hand, having too much stock would mean incurring excessive
costs in the form of business entity space or factory space, recording and
handling costs and lack of liquid cash.
So, how much stock to keep?
Striking a perfect balance is every business’s intent which
needs effectively monitoring inventory levels, making the decision when to
stop, make new orders and chase stock-outs and excess stock.Taking an example of an outstanding company
for air conditioning in Lake Charles Los Angeles, we find how inventory control
can revolutionize and expedite service delivery, cut down on cost and improve
Prior to adopting Wasp Mobile Computer Technology, the
company relied on other means of inventory control including use of spreadsheet
which proved ineffective. “the company could unexpectedly ran out of particular
items, forcing technicians to make time-consuming trips to a regional supply
depot. Besides the drive time and added expenses, service technicians wasted
time waiting in line to receive the correct parts, leaving customers waiting
and wondering when their service technician would return to complete the job” (Ace Air Conditioning , n.d).
the Wasp’s Inventory Control solution software, the company can quickly update
inventory counts by scanning the barcodes on replacement parts as they are
received. Then, when service technicians take parts from the warehouse for a
job, the inventory items are checked out to them (Wasp Barcode Technologies, 2014). The company now uses the Wasp’s
inventory software to create reorder reports, which inform them when stock
becomes low for a particular item and provide recommended reorder
quantities. At the same time, the manager can look at inventory reports to gain
insight into which items are selling and which are not, thereby enabling him to
adjust his inventory, ensuring he has in-demand items on hand.
In summary, Ace Air
Conditioning company realized overall objective of inventory management:
achieving satisfactory levels of customer service while keeping inventory costs
within acceptable bounds. With the new technology, the have achieved a balance
in stocking, since the software easily facilitates timing of orders (“when”)
and Size of orders (“how much”).
Ace Air Conditioning , n.d. The Best Company for
Air Conditioning in Lake Charles!. [Online] Available at: http://airconditioning.inlakecharlesla.com/ [Accessed 11 February 2014].
Technologies, 2014. Inventory Control: Ace A/C and Heating. [Online]
Available at: http://www.waspbarcode.com/case-studies/inventory-control/ace-a-c-and-heating-service.[Accessed 11 February 2014].