Harvey Industries

BUS644: Operations Management

Harvey Industries is a Wisconsin company which specializes in the assembly of high-pressure washer systems and in the sale of repair parts for these systems. Recently the company was assigned a new company president due to the untimely death of the previous president. In evaluating the company, the company has been losing money for three of the last four years. The new appointed president has identified several areas to be improved including improper inventory control.

Regardless of the business or operation it is important to realize the importance of inventory. Inventory is a stock or store of goods. Inventories are not only vital for operations but are a major contributing factor of resources, customer service, and ROI – Return on Investment. Effective inventory management allows organization to exceed customers’ expectation while maximizing the organization’s net profits.

The first area of concern in Harvey Industries is a lack of a proper system to track the inventory on hand as well as rotating supplies. Two systems that first need to be initiated include a perpetual inventory system as well as a periodic system. In a perpetual inventory system, also referred to as a continual system, “inventory is traced from the time it enters the company as well as the removal of this inventory on a continuous basis” (Stevenson, 2009). There are both simple perpetual inventory systems as well as more advanced online bar coding systems. My suggestion for Harvey Industries is to evaluate the inventory coming in and determine if the suppliers currently provide bar coding for these items. The bar codes are easily scanned as products are rotating. This information is then entered into a computer system allowing real time inventory information. This system can tell a company how much inventory is on hand for every product, alert the company when supplies are low, reordering is needed, and monitor inventory activities....