Submitted by: Submitted by kyler805
Views: 1155
Words: 490
Pages: 2
Category: Business and Industry
Date Submitted: 02/25/2009 09:27 PM
Team Arctic Blast
Acme Widget Company Write-up
The problems facing Acme Widget Company after decentralizing its inventory control to sales locations include:
• sales cannot get stock shipped because warehouses do not have the inventory
• warehouse not able to get their stock replenishment orders because the customer orders are getting preference
• no communication between sales, warehouse, and branches
• warehouses limited to one-month supply
• little experience with branch-warehouse system overall
• using inventory turnover as a metric of successful management
• lengthy lead times
The issues that the sales manager blamed on the production and inventory control personnel included:
• did not understand the inventory increase (“a month supply at one location is the same as a one month supply divided among the four locations”)
• 40% of the orders were still shipping out of the main location because the branch warehouses did not have the inventory
• missed quota by 10-15% ' poor customer service
• warehouse orders were not considered a priority ' poor customer service
• customer orders took priority over the stock (warehouse) replenishment orders despite the fact that the warehouses were their biggest customers
• poor management at the main plant (sales force did not have the needed support)
The issues that the inventory manager blamed on the marketing and sales control personnel included:
• Warehouse true and projected inventory needs unclear - they do not know if the warehouse truly needs the inventory, so they are torn when a warehouse order comes in versus a customer order. They know the customer needs the order immediately, but the warehouse order may be premature
• When they receive the orders, they do not have the inventory levels of the warehouses and they receive the orders too late
• Warehouses purposely keep inventories low during off-peak times, which leads to chaos when inventory demand rises, resulting in a shortage of...