Vonkel Case Study

Global Supply Chain

Question 1

To manage their inventory effectively, Vonkel needs to:

* Select a system for storing inventory

* Track storage and movement of goods accurately

* Maintain records of all inventory and storage

Considering over 80 percent of Thembeka’s total inventory costs consist of finished product, the warehousing operation that Vonkel has inherited is larger, more complex, and more costly than necessary. Therefore, Vonkel should thoroughly analyze their entire inventory to develop a more efficient and less costly system.

* They should begin by reviewing all inventory and categorize it: unfinished inventory, obsolete product, overstocks, higher value items, high turnover items, etc.

* Develop auditing procedures that will provide benchmarks to determine how long it is acceptable to keep inventory on hand before it is designated a problem.

* Evaluate inventory movement in terms of location, product line, season, lead time, etc.

* Based on these evaluations, assign finished product to relevant locations in order to: decrease lead times to fulfill orders; anticipate peak demand periods; maintain an appropriate ratio of fast-moving, less popular, and slow-moving items, etc.

Question 2

There are multiple strategies that Vonkel could use to maintain optimal inventory levels:

* Use an ABC classification system, where “A Category” are the most popular and fast-moving items, “B Category” are items that are less active and popular, and “C Category” are slow-moving items. This aids in determining where to locate items in inventory, with A-class items conveniently placed for easiest access. This type of inventory stratification can be employed across multiple storage locations or when determining the layout of an individual storage area.

* Improve data collection strategies to provide a better understanding of where inventory is located and lead times associated with all products. With more information Vonkel...