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Essay / Scientific Glass, Inc.: Inventory Management
Scientific Glass, Inc., a glassware manufacturing company seeking to capitalize on growth opportunities within its industry, both domestically and internationally. Before embarking on expansion, the company is well aware that it needs to significantly improve its poor management and inventory controls. In this article, I will discuss the key issues in the business and, through analysis, make sense of why the key issues require immediate attention and change. Additionally, I will give recommendations to Scientific Glass, Inc. on initiatives that can be taken to improve their key issues as well as some strategic ideas on how they might want to focus their resources. My analysis and recommendations are based on information provided in the “Scientific Glass, Inc.: Inventory Management” case study, authored by Steven C. Wheelwright and William Schmidt and on concepts in the “Operations Management” textbook, by J . Heizer and William Schmidt. B. Rendered. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay Scientific Glass, Inc. (SG) is a specialty scientific glassware company that manufactures and houses its inventory. The company and industry are growing rapidly; SG's sales are expected to grow by 20% in 2010. The company remains committed to its "dual goals of continued sales growth and increased customer satisfaction" (Wheelwright, S., Schmidt, W., 2011), and to maintain a such competitive advantage, in 2008, SG increased its customer service level target to 99%. To improve customer response time, they rented six warehouses in the United States and Canada, but without a well-thought-out inventory management system, SG quickly faced problems with increasing inventory. The company just hired Ava Beane for the role of inventory planning manager; Beane’s challenge is to implement an inventory control system aligned with the “twin goals” of SG (Wheelwright, S., Schmidt, W., 2011). Successful strategy and execution are crucial for the company as it prepares for growth and global expansion. Problems The main problems of SG: (1) Poor inventory control system and high inventory balances; inventories increased by 78% between 2008 and 2009. (2) An unnecessary number of regional warehouses have become costly and inefficient. (3) Capital required to invest in new factory equipment in 2010 and for expansion of international distribution in Latin America, Europe and the Asia-Pacific region. Also consider an above-industry order fulfillment rate of 99%. The first problem identified is the use of two separate IT systems: “one for ordering and inventory tracking and another for manufacturing and warehousing operations” (Wheelwright, S., Schmidt, W., 2011, p. This misalignment creates miscommunication which ultimately creates inaccuracies in inventory records Additionally, the company's ordering system is automated and places orders on a 2-week cycle. based on inaccurate records) reaches a certain threshold, the system automatically places inaccurate manufacturing orders Poor inventory controls are costly due to excessive inventory and burden SG's service level when not in place. able to fulfill an order due to a stock shortage During 2008, SG rented six warehouses across North America, adding to its two existing warehouses, including one located in Waltham. ,., 2011,.