<abstract xmlns="http://www.w3.org/1999/xhtml"><p>Inventory management’s fundamental problem starts with maintaining equilibrium among the operating efficiency, cost of investment, and other allied costs with extensive inventories to keep the actual conflicts at the minimum while optimizing the inventory holding levels. But, inventory management practices have not been well exploited in various manufacturing industries yet. In this study, inventory management tools, i.e., ABC and VED analysis, have been applied in the manufacturing industry, considering 146 items as raw material for an assembly. A total of 15 items under ‘AV’ class have been identified that consume 82.05 % of the total cost, and these items need strict control and frequent ordering. Sigma level of suppliers is also calculated, which comes out to be 2.36, and it must be improved to reduce the overall inventory cost.</p></abstract>

Inventory management’s fundamental problem starts with maintaining equilibrium among the operating efficiency, cost of investment, and other allied costs with extensive inventories to keep the actual conflicts at the minimum while optimizing the inventory holding levels. But, inventory management practices have not been well exploited in various manufacturing industries yet. In this study, inventory management tools, i.e., ABC and VED analysis, have been applied in the manufacturing industry, considering 146 items as raw material for an assembly. A total of 15 items under ‘AV’ class have been identified that consume 82.05 % of the total cost, and these items need strict control and frequent ordering. Sigma level of suppliers is also calculated, which comes out to be 2.36, and it must be improved to reduce the overall inventory cost.

Achieving cost efficiency through increased inventory leanness: Evidence from manufacturing industry

Dept. of Production & Industrial Engineering

Production Engineering Archives

This work is licensed under the Creative Commons Attribution-ShareAlike 4.0 International License.

Inventory management’s fundamental problem starts with maintaining equilibrium among the operating efficiency, cost of investment, and other allied costs with...

Achieving cost efficiency through increased inventory leanness: Evidence from manufacturing industry

Published Online: Mar 26, 2021

Page range: 42 - 49

Received: Jan 11, 2021

Accepted: Feb 15, 2021

DOI: https://doi.org/10.30657/pea.2021.27.6

Keywords
Inventory management, ABC, VED analysis, manufacturing industry, lean production

© 2021 Rahul S Mor et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-ShareAlike 4.0 International License.

Achieving cost efficiency through increased inventory leanness: Evidence from manufacturing industry

Published Online: Mar 26, 2021

Page range: 42 - 49

Received: Jan 11, 2021

Accepted: Feb 15, 2021

DOI: https://doi.org/10.30657/pea.2021.27.6

KeywordsInventory management, ABC, VED analysis, manufacturing industry, lean production

© 2021 Rahul S Mor et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-ShareAlike 4.0 International License.

Keywords
Inventory management, ABC, VED analysis, manufacturing industry, lean production