OPERATIONS MANAGEMENT TERM PAPER ON

Inventory Management & Control-Latest trends

and techniques

1
Contents
INTRODUCTION.......................................................................................................................................3
WHY INVENTORY CONTROL?...................................................................................................................5
INVENTORY MANAGEMENT AND CONTROL :-.........................................................................................6
OBJECTIVES OF INVENTORY MANAGEMENT AND CONTROL:-................................................................7
OPTIMUM INVENTORY............................................................................................................................7
INVENTORY TURNOVER.......................................................................................................................8
ECONOMIC LOT SIZE CONCEPT............................................................................................................8
ORDERING COST..................................................................................................................................8
INVENTORY COSTS.................................................................................................................................10
FACTORS INFLUENCING INVENTORY MANAGEMENT AND CONTROL...................................................10
INVENTORY MANAGEMENT..............................................................................................................11
Just-In-Time Concept.........................................................................................................................12
INVENTORY CONTROL RECORDS AND PROCEDURES.............................................................................16
STEPS TO SETTING-UP AN INVENTORY CONTROL SYSTEM:-..................................................................18
FOR BETTER INVENTORY MANAGEMENT:.............................................................................................19
LATEST TRENDS AND TECHNIQUES IN INVENTORY MANAGEMENT:.....................................................21
CASE STUDY:..........................................................................................................................................21
CONCLUSION.........................................................................................................................................23
REFERENCES:.........................................................................................................................................24

2
INTRODUCTION
Getting leaner is the mantra followed by almost every inventory management
professional in the world. There have been tremendous changes in the
manufacturing industry with respect to inventory control and management in the
recent years with the rapidly increasing international competition and new
technology. One of those changes in the application of the Just In Time technique.
Much publicity was given during the early 1980s to the Japanese – style just-in-
time inventory concepts. The goal of JIT is simple enough; get the material to its
next processing point just at the time it is needed. Theoretically, then, no inventory
will be needed. JIT can be implemented with manufacturing work-in-process or
with material purchased from outside vendors. Changes to recording methods
include the use of different methods of information collection and processing, e.g.
bar coding in retailing and manufacture and electronic exchange of information.
Control methods are more computer based and are becoming part of increasingly
integrated systems.
The ultimate objective of all manufacturing controls is to realize a profit
through the operation of the business. Failure of deliver order on time is one
principal cause of loss of business and customers. Effective control of the material
throughout the manufacturing cycle reduces the chance of this problem arising.
Inventories are thus a necessary part of the contemporary manufacturing
environment, and they must be managed if profit is to accrue.  Acc to the survey by
Retail Industry Leaders Association, 52 percent of retailers agree that they have a
handle on matching inventory to demand. But 72 percent also agreed that they are
over-inventoried on slow-moving Stock keeping units and another 53 percent said

3
they are under-inventoried in fast-moving Stock keeping units. Inventory can be
broadly classified into:
 Raw material
 Purchased parts
 Work-in progress
 Finished goods
 Supplies

Raw Material
A raw material inventory includes all items that, after being received at the plant,
require additional processing before becoming an identifiable part of the finished
product.
Purchased Parts
This classification of inventory is applied to component parts of a product that
need no additional processing before being assembled into the finished product. In
some cases this material may be classified as raw material inventory.
Work –in Progress
This classification of inventory is self-explanatory. All material that leaves either
raw material stores of purchased parts stores enters the work-in-progress inventory
until the product is completed and placed in finished goods.
Finished Goods
It is the stock of finished products. Generally speaking, this classification applied
to the quantities of finished goods that are held at the factory awaiting shipment.
Supplies
All the materials needed for the operation of the plant that are not used as parts of
the finished product are classified as supplies.

4
WHY INVENTORY CONTROL?
Control of inventory, which typically represents 45% to 90% of all expenses
for business, is needed to ensure that the business has the right goods on hand to
avoid stock-outs, to prevent shrinkage (spoilage/theft), and to provide proper
accounting. Many businesses have too much of their limited resource, capital, tied
up in their major asset, inventory. Worse, they may have their capital tied up in the
wrong kind of inventory. Inventory may be old, worn out, shopworn, obsolete, or
the wrong sizes or colors, or there may be an imbalance among different product
lines that reduces the customer appeal of the total operation. The ideal inventory
and proper merchandise turnover will vary from one market to another. Average
industry figures serve as a guide for comparison. Too large an inventory may not
be justified because the turnover does not warrant investment. On the other hand,
because products are not available to meet demand, too small an inventory may
minimize sales and profits as customers go somewhere else to buy what they want
where it is immediately available. Minimum inventories based on reordering time
need to become important aspects of buying activity. Carrying costs, material
purchases, and storage costs are all expensive. However, stock-outs are expensive
also. All of those costs can be minimized by efficient inventory policies.
Inventory control involves the procurement, care and disposition of materials.
There are three kinds of inventory that are of concern to managers:
• Raw materials,
• In-process or semi-finished goods,
• Finished goods.

5
If a manager effectively controls these three types of inventory, capital can be
released that may be tied up in unnecessary inventory, production control can be
improved and can protect against obsolescence, deterioration and/or theft, The
reasons for inventory control are:

• Helps balance the stock as to value, size, color, style, and price line in
proportion to demand or sales trends.
• Help plan the winners as well as move slow sellers
• Helps secure the best rate of stock turnover for each item.
• Helps reduce expenses and markdowns.
• Helps maintain a business reputation for always having new, fresh
merchandise in wanted sizes and colors.

INVENTORY MANAGEMENT AND CONTROL :-

We shall be interested primarily in the control of material in manufacturing.
Actually, we are concerned with the control of the “flow” of material from a “raw”
state to a finished product. Most industries buy material, transport it to the plant,
change the material into parts, assemble parts into finished products, and sell and
transport the product to the customer.

6
 Fig:- Flow of Materials through production cycle.

OBJECTIVES OF INVENTORY MANAGEMENT AND CONTROL:-

The ultimate objective of all manufacturing controls is to realize a profit
through the operation of the business. A more restricted objective of the control of
material is to satisfy the customer by meeting the schedule for deliveries. Failure of
deliver order on time is one principal cause of loss of business and customers.
Effective control of the material throughout the manufacturing cycle reduces the
chance of this problem arising. In any consideration of the nature of discrete part
manufacturing it is plain that as material flows through the system. It is subjected
to starts and stops. Material must wait for machines or materials handling
equipment to become available and must be ordered in advance of production and
stored in a warehouse or storage area. Inventories are thus a necessary part of the
contemporary manufacturing environment, and they must be managed if profit are
to accrue.
It should be noted, however, that the introduction of elements of computer–
integrated manu-facturing have reduced, to some extent, manufacturing
management’s dependence on some type of inventories. Also, the Japanese
concept of “just-in-time” production scheduling may reduce manufacturing’s
dependence on inventories.

OPTIMUM INVENTORY
The complex relationship between modern industry and its market presents a
real problem in the size of inventories that should be maintained. Large inventories
in the face of declining sales mean lower profits. Small and inadequate inventories
in the face of an increasing market demand may result in the loss of sales to

7
competitors – and a decreased profit. Recognition of these conditions should
indicate that the optimum inventory is not necessarily either the minimum or the
maximum level of inventory; nor is it operation at a maximum inventory turnover.

INVENTORY TURNOVER
A very common index of inventory control, inventory turnover is the ratio of
the value of
the product shipped to the average investment in inventory for the same period.
Inventory turnover =( value of product shipped)/( value of average
inventory)
Obviously, the higher this index, the lower the inventory levels and the
lower the cost of
maintaining the inventories. Also, it is obvious that a high index indicates a shorter
manufacturing cycle with all the saving inherent therein.

ECONOMIC LOT SIZE CONCEPT

Throughout this century management scientists have devoted considerable
effort to the
mathematical formulation of inventory models. An elementary building block of
this analysis has been the so-called economic lot size mode. Through the years, it
has been used to determine manufacturing batch quantities for in-plant production
orders or purchase orders and also for determination of “optimum” inventory
levels.
Rate of Usage
The anticipated rate of usage of the part must be considered together with
the time required to produce a replacement lot. Quantities should be established
such that at all times stock will be available to the assembly departments. This
principle is used by the materials control group in determining inventory levels.

8
ORDERING COST
Next in importance is the cost to acquire the item. In a manufacturing
situation this would be a setup cost. If the part is purchased an ordering cost would
be incurred. For a cost such as this, the quantity purchased or made is important the
larger the quantity, the lower the per-piece cost.
Deterioration or obsolescence
Another factor to be considered is the deterioration or obsolescence of a
large stock of parts. All these factors must be weighed by management and an
economic lot size determined that will result in the acquisition of parts at an
optimum cost per unit. Availability of productive capacity for such lot sizes must
be determined and included in the considerations. Economic manufacturing lot
sizes must be checked periodically, as they are subject to revision owing to sales
trends and variations in the factors mentioned above.
Elementary lot size model
The use of economic order quantity models has been in effect for many
years, and the literature abounds with the many formulations that have been
proposed. One of the problems that arises in the use of mathematical model is the
fact that many factors have a bearing on optimum lot sizes, and one cannot weigh
all of them in a simple formula.

9
 Fig: Cost Relationship for EOQ model

Computer Assistance
A full description of the possible and actual use of computers as an aid in the
management and control of inventories is beyond the scope of this book.
Obviously, how ever, when large quantities of numbers have to be kept readily
available and be changed from time to time, the computer is the direction to go for
assistance if its use can be justified. One can do much posting of numbers by hand
for the rental or purchase price of a computer, but there will be a point in almost
every company’s operation when the inventory problem can best be handled by
computer, most often using a database management system.

INVENTORY COSTS
Typically, sales personnel wish their company to stock large quantities of all
items in the product line so they can meet even the most unreasonable demands of
their customers. Typical production personnel wish to keep large quantities of parts
on hand so there is never any danger of a production line having to shut down for
lack of parts. Inventory people themselves often get carried away with descriptions
of computer systems such as those just described and urge the adoption of such
system often just for the sake of proving that it can be done. The point to make
here is that all these things cost money, and these costs go beyond the money cost
of the parts or products themselves. Since such costs are often lost in overhead cost
calculations it is easy for managers to overlook them.

10
FACTORS INFLUENCING INVENTORY MANAGEMENT AND CONTROL
Many factors influence inventory management and control. The principal
effects of these factors are reflected most strongly in the levels of inventory and the
degree of control planned in the inventory control system.

Type of Product
If the materials used in the manufacture of the product have a high unit value
when purchased, a much closer control is usually in order. Jewelers are much more
careful with their stock of diamonds than they are with display cases full of low-
priced costume jewelry. This same principle holds in manufacturing.
Type of Manufacture
The close relationship between the type of product and the type of
manufacture makes an analysis of the effect on inventory controls somewhat
repetitious. Continuous manufacture is common to the manufacture of standard
products. However, some standard products are made in batches. Where
continuous manufacture is employed, the rate of production is the key factor. Here,
as a matter of fact inventory control is of major importance and in reality controls
the production of the product.
Volume
The volume of product to be made, as represented by the rate of production,
may have
little effect on the complexity of the inventory problem. Literally millions of brass
bases for light bulbs are manufactured each month involving the control of only
two principal items of raw inventory.

11
INVENTORY MANAGEMENT
The planning of the control of inventory can be divided into two phases,
inventory management and inventory control. Inventory management
accomplishes the first phase, consisting of:
1. Determination of optimum inventory levels and procedures for their
review and adjustment
2. Determination of the degree of control that is required for the best results
3. Planning and design of the inventory control system
4. Planning of the inventory control organization.

Optimum Inventory Levels

Earlier, we discussed how inventory management is responsible for
determining the inventory level that will result in the best profit. We have already
pointed out that the trend of sales must be watched closely and inventories adjusted
in advance of the change in rate of production as determined by actual sales. But
this is not the only factor that must be considered by inventory management when
determining inventory levels.
The planning for the actual production of the product may involve problems
of leveling
production, that is producing at a constant rate even though sales may fluctuate. In
slack times products are built to stock; the finished goods inventory is increased to
offset the demand anticipated when future sales surpass the production rate of the
plant. The proper evaluation of this factor requires close cooperation with the
manufacturing function.
Degree to Control
Inventory management must decide just how much control is needed to
accomplish the objective. The least control – as evidenced by systems, records, and

12
personnel- that is required to perform the function efficiently is the best control.
This problem of the degree of control can be approached from the viewpoint of
quantity, location and time.

Just-In-Time Concept
Much publicity was given during the early 1980s to the Japanese – style
just-in-time inventory concepts. Entire books have been written on this subject and
many articles have appeared in professional and trade journals. A recent, extensive
literature search was conducted and identified over 860 just-in-time articles
published in professional journals since 1970. We will just briefly describe the
concept here.
The goal of JIT is simple enough; get the material to its next processing
point just at the
time it is needed. Theoretically, then, no inventory will be needed. JIT can be
implemented with manufacturing work-in-process or with material purchased from
outside vendors. The latter will require coordination with these vendors. Generally,
they will cooperate if it is a case of getting the order or not, it may turn out that the
vendor will carry the inventory.
One truck transportation company obtains much of its business by catering
to companies that must deliver parts to other companies “just in time”. The Toyota
company in Japan has developed a scheduling discipline for internal control of
inprocess material movement, called kanban, which substantially reduces WIP
inventories and hence reduces the associated costs.
Inventory Control
The inventory control group puts the plans of inventory management into
operation. These plans are seldom complete in every detail. The day-to-day
planning required to meet production requirements – the second phase of planning
for inventory control –is the responsibility of this group.
13
Inventory Control Systems
Control of manufacturing inventories is basically a problem of industrial
communications. Earlier, we indicated that the complexity of these systems is
directly proportional to the number of items in the inventories and to the number of
transactions that have to be recorded to keep abreast of the movement of the
material.
It should be emphasized here that a great many of the inventory control
systems in use
in industry today are computer-oriented systems, however, the initial part of the
discussion in this section will be concerned with basic concepts and data associated
with inventory control procedures in general, without reference to capabilities of
computer systems. When inventory forms are discussed, it is implied that these
could also be records associated with a file in a database management system.
The basic information normally carried on perpetual inventory records
includes:
1. On order. This part of the record shows the quantity of material ordered
but not received. Now order are added in this column and receipts
subtracted.
2. Received. All receipts are posted here; there is no balance quantity in this
column.
3. On hand. This balance figure represents the quantity of the item that
should be in the stock room. Receipts are added to this column and issues
subtracted.
4. Issued. A record of all quantities issued to the factory is entered in this
column.

14
 5. Allocated. In this column are entered the quantities to be reserved for later
issue for specific order. Reserving of materials still in this stock room will
ensure their availability when they are needed on the manufacturing floor.
6. Available. This is the quantity of material “on hand” that is still available
for assignment to future orders.

Pricing Inventories.
There are four basic ways to price inventories for accounting purposes:
1. First in – first out (FIFO) Under this procedure, all issues are priced at the
cost of the oldest lot until that lot is used up. Then the price of the next
oldest lot is used, and so on. In other words the first price into the inventory
is the first price out of the inventory when issuing materials.
2. Last-in-first out (LIFO) under this procedure, all issues are priced at the
cost of the newest lot until that lot is used up. Then the price of the next to
newest lot is used, and so on. If, in the meantime, another lot comes in, the
price of this even newer lot is used when issuing material until the entire
quantity involved is issued, at which time the price reverts to the next newest
unused quantity.
3. Average value. Under this system, the values of issues are computed by
using the weighted average cost of the material in stock. As new material is
received at slightly different prices a new computation must be made as to
the weighted average cost of the total material on hand.

15
 4. Standard costs. A standard cost is established for each material, and all
disbursements are charged out at this standard value regardless of the price
actually paid for the material.
Basic Communication Forms
The basic communication forms used in perpetual inventory control are:
1. Purchase Requisition. This form is prepared by inventory control when
new quantities of material should be ordered.
2. Shop order. This form is prepared by inventory control when quantities of
material need to be made by the shop for stock.
3. Receiving reports. These are the records of material received by the stock
room.
4. Stores requisition. This form authorizes the issuance of any class of
inventory material from a controlled storage to the shop. These requisition
may be prepared by the production planner (as we well discuss under
production control) or by foremen, supervisor, or other authorized personnel.

INVENTORY CONTROL RECORDS AND PROCEDURES

A detailed discussion of the many records and procedures that are used for
control of inventories is beyond the scope of this text. These are many commercial
systems, such as Ditto, McCaskey Register, Remington Rand, International
Business Machines, and others too numerous to mention. Inventory records may be
posted in ledgers or on cards, with each entry made by hand.
Basic data of inventory transactions may be typed into a computer terminal
and the many calculations or reports can be prepared by computer; however the use
of bar code and bar code scanners for point-of-transaction recording of data is fast
becoming an accepted way of collecting inventory data. One can see this every day

16
at grocery and department stores but it is also quite extensively used in industry.
Bar codes, similar to those appearing on consumer goods, are seen in warehouses
and production lines. Hand-held scanner/readers are interfaced with personal
computers and are quite flexible for inventory control purposes.
Bin Control
We have discussed perpetual inventories at length. Again they are applicable
to what we have previously designated as high or intermediate value inventory
items. It is still evident that such procedures as we have touched on briefly are
costly. For those items in which the cost of keeping such records cannot be
justified, a bin control is usually adopted.

Storerooms
Storerooms (or stock rooms) are areas in which material is held in controlled
storage. All material received in the area is counted and recorded, none is issued
without the proper stores requisition. Controlling materials in such a manner costs
money in terms of space, personnel, and handling. These costs must be offset by
better service to the factory and reduced loss of materials.
Physical Inventories
A physical inventory is used to verify the balances shown on the perpetual
inventory records and to obtain a correct count on all items of inventory that may
be on a bin control system. Physical inventories may be taken in two different
ways. Using the first method, plans may be made for a complete shutdown of
manufacturing activity.
Material Requirements
Earlier sections of this chapter have presented what might be called a
classical approach to inventory management and control. A some what more

17
elaborate and computer – based approach called material requirements planning
(MRP) has been available to industry for over 25 years.
The previous system placed considerable emphasis on the “when” and “how
much” questions of inventory management. The “when” was answered by the
determination of order points, and “how much” was determined by calculations of
economic order quantities (EOQ) or economic manufacturing quantities (EMQ).
The literature abounds with formulations of these two determinations under
various sets of conditions.

Fig:Coordinating role of MRP

STEPS TO SETTING-UP AN INVENTORY CONTROL SYSTEM:-

1. Determine your ideal inventory level
a. Find out average inventory turnover rate for industry
b. Determine ideal inventory level based on factors such as amount of
capital available, consumer demand, historical sales patterns, quantity
discounts, storage space, and supply levels.
c. Calculate Inventory carrying costs.
d. Calculate EOQ & Inventory turnover rate.

18
 2. Establish a purchase plan.
a. Establish guidelines for buying and selling inventory items.
b. Find suppliers
c. Establish an incoming order inspection policy
d. Calculate reorder points for each item in your inventory
e. Establish a discontinuation policy.
3. Set-up an inventory record keeping system
a. Pick an inventory control system and record keeping method
b. Develop an “Inventory In-stock Record” & “Period Ending Inventory
Record”
4. Other concerns
a. Establish a markdown policy for products that don’t move quickly
enough at normal price levels.
b. Establish a policy for valuating inventory to determine cost of goods
sold.

FOR BETTER INVENTORY MANAGEMENT:

At time of delivery:

Verify count -- Make sure you are receiving as many cartons as are listed on the
delivery receipt.

 Carefully examine each carton for visible damage -- If damage is visible,

note it on the delivery receipt and have the driver sign your copy.
 After delivery, immediately open all cartons and inspect for merchandise
damage.
When damage is discovered:

19
  Retain damaged items -- All damaged materials must be held at the point
received.
 Call carrier to report damage and request inspection.
 Confirm call in writing--This is not mandatory but it is one way to protect
yourself.
Carrier inspection of damaged items:
 Have all damaged items in the receiving area -- Make certain the damaged
items have not moved from the receiving area prior to inspection by carrier.
 After carrier/inspector prepares damage report, carefully read before signing.
After inspection:
 Keep damaged materials -- Damaged materials should not be used or
disposed of without permission by the carrier.
 Do not return damaged items without written authorization from
shipper/supplier.

SPECIAL TIPS FOR MANUFACTURERS

If you are in the business of bidding, specifications play a very important role.
In writing specifications, the following elements should be considered.
 Do not request features or quality that is not necessary for the items'
intended use.
 Include full descriptions of any testing to be performed.
 Include procedures for adding optional items.
 Describe the quality of the items in clear terms.
The following actions can help save money when you are stocking inventory:
 Substitution of less costly materials without impairing required quality;

20
  Improvement in quality or changes in specifications that would lead to
savings in process time or other operating savings
 Developing new sources of supply;
 Greater use of bulk shipments;
 Quantity savings due to large volume, through consideration of economic
order quantity;
 A reduction in unit prices due to negotiations;
 Initiating make-or-buy studies;
 Application of new purchasing techniques;
 Using competition along with price, service and delivery when making the
purchase selection decision.

LATEST TRENDS AND TECHNIQUES IN INVENTORY MANAGEMENT:

In recent years, two approaches have had a major impact on inventory
management: Material Requirements Planning (MRP) and Just-In-Time (JIT and
Kanban). Their application is primarily within manufacturing but suppliers might
find new requirements placed on them and sometimes buyers of manufactured
items will experience a difference in delivery.

Material requirements planning is basically an information system in which

sales are converted directly into loads on the facility by sub-unit and time period.
Materials are scheduled more closely, thereby reducing inventories, and delivery
times become shorter and more predictable. Its primary use is with products
composed of many components. MRP systems are practical for smaller firms. The
computer system is only one part of the total project which is usually long-term,
taking one to three years to develop.
Just-in-time inventory management is an approach which works to eliminate
inventories rather than optimize them. The inventory of raw materials and work-in-
21
process falls to that needed in a single day. This is accomplished by reducing set-
up times and lead times so that small lots may be ordered. Suppliers may have to
make several deliveries a day or move close to the user plants to support this plan.

CASE STUDY:
Case study 1: Best Practices in Inventory Management
A leading consumer products company dealing in cosmetics and other
personal care products was seeking ways to:
 Reduce inventory levels across their forward supply chain.
 Improve Inventory Record Accuracy at their storage points.
 Accurately track damaged goods at various points in the supply chain.
The above problems together were a significant burden to the company.
Implementation of best practices after a detailed business analysis resulted in the
following benefits:
 Inventory Record Accuracy improved to 95% within 2 months.
 Stock levels reduced by about 30% across stocking points in the supply
Chain.
 Complete visibility was achieved in the supply chain with respect to
damaged goods inventory

ACTION STEPS ADVISED AND UNDERTAKEN

Process Improvements:
1. Bin card system was implemented for each rack at the CFAs and the delivery
staff was trained in relevant bind card maintenance practices.
2. A process to regularly reconcile physical and book stocks using the cycle-
count process was mandated
3. An IT solution was identified and implemented for

22
  Accounting the Cycle count process,
 providing MIS on deviations and accounting the adjustment notes,
 Computing the forecast using consolidated orders,
 with factoring for promotions and seasonality,
 Calculating safety stock level based on number of weeks of sales target,
 Facilitating communication of closing stock data from BSR and depots to
logistics department,
 Facilitating communication of damaged and un-saleable stock quantity to
commercial department ,
 Automatically allocating stocks using FIFO principle at the depots
4. Demand planning and forecasting were made a periodic activity using the
above IT solution to align forecasting with market orders and actual sales. The
process of setting safety stocks at depots was made periodic and dynamic, based
on updated sales data.
5. Norms were set to act on damaged old and other dead stocks. Clear action
steps were laid down to liquidate or destroy these stocks. Responsibility and
accountability were set to in the organisation to monitor and authorise activities
in this regard based on visibility provided by the IT solution.

CONCLUSION
Now that we know the importance and criticality of inventory management
and control, this must be given utmost importance in both the manufacturing and
manufacturing industries. There can be changes and trends and further
developments in this aspect of inventory management, but it is up to the
organization to decide which method is optimum for them and follow the same.
The market is changing at an increasing rate as the demand of certain goods. It is
thus the responsibility of every operations manager to keep a track of the latest
developments in inventory control and choose optimally from the options
available. The Materials Requirement Planning and the Just In Time techniques

23
have changed the face of many businesses. The companies are now able to cut
down waste and get leaner. As the survey by the Retail Industry Leaders
Association shows that most of the retailers are still unable to meet the demand of
the fast moving stock, it is a challenge for these retailers to meet the demand by
appropriate application of the inventory management techniques. Inefficient
management of inventory can lead to great losses. It requires proper understanding
of these techniques to strike the balance where the supply can meet the demand of
the products, raw materials etc, nothing more or nothing less. Technology changes
have played a major role in the changing trends of inventory management. Wal-
Mart which is considered the pioneer in maintaining proper inventory levels across
its stores in the world uses technology to its maximum to achieve accuracy in the
numbers of the stock available.

The just in time technique is being optimally applied by Wal-Mart and thus
it is able to stay lean for years now. Now that Wal-Mart is entering India, it can be
the benchmark for many traditional Indian retailers who have been following the
traditional techniques of inventory management. It is on the other side a challenge
for Wal-Mart to live up to its reputation and maintain the same consistency of
inventory management as Indian market demand for products fluctuates at a
greater rate than other markets across the world. It can thus be concluded that a
firm to enhance its profit management needs to give first priority in understanding
the concepts of inventory management and control and apply the techniques
appropriately. This calls for a good study of the market demand, choosing the right
technology and appointing competent a workforce to take it further.

REFERENCES:
1. www.google.com
2. www.wikipedia.com
3. “operation management”, ninth edition by Jay Heizer, Barry Render,
Jagadeesh Rajasekhar.

24