Inventory management is critical in aspect of business operations involving translocation of goods and materials from one place to another or within a facility. Inventory management helps the manufacturer to minimize materials damage and loss of raw materials, finished products or goods being processed while in the transport system. The tool can also be used by wholesalers and retailers to track down their transactions, cost and stock control and in asset management. Literally inventory is similar to stock of any item necessary in the operation of a business. (Taylor)
The reduction of logistical fee is one of the crucial areas in cutting down the general operational cost in an organization translating into profit increment. The decision on the cheapest, reliable, safest and most efficient mode to be used is usually made based on the inventory records. For example, while air transport can be the best mode of transport in terms of urgency and safety, its expensive compared to other modes like rail or road transport systems. In the long run, through the records the manufacturer will be able to know a cheaper means depending on the indication of inventory records. (Taylor)
Through perfect management of the inventory records, the business will be able to determine any uncertainty that might exist in the delivery chain. This helps to minimize operational cost by conducting purchases when the prices are low or doing the purchases from a cheaper market. The management can also assist in detecting any malpractice by the transporters as the records are utilized in the verification process at the point of delivery. At this point, the damaged items are separated and the cost can be transferred to the carrier (Taylor)
As far as safety of goods is concerned, the materials on transit should be efficiently handled to minimize chances of their damage during transportation. The goods should be packaged well depending on their nature and risk of spoilage. Cases in point are the fragile items which should be packaged separately to avoid their damage during transportation. On the other hand, perishable goods like food stuffs should be refrigerated or a preservative added to them. Therefore, transported materials if properly handled reduce loss to the organization. The choice of mode of transportation is also an issue of major concern when moving goods within one location to another. Bulky material can be moved through rail or road to their destination while if the goods are in fluid form, flammable or dangerous the pipeline can be considered. (Ruffa)
Comprehensive system analysis is a financial evaluation process that exclusively identifies the appropriate course of action to be taken. It also gives efficient judgment in the course of business operations in the whole areas of an organization whenever a complex issue arises. Partial comprehensive analysis on the other hand targets a specific department within a business setup. The comprehensive analysis involves radical investigation in all the organization systems e.g. management, operations, marketing and other sectors. On the contrary, partial analysis involves limited examination of the course of action, probable results, risks involved and development of proportional framework on how the decisions will be taken. (Management Coaching and Training Services)
The adoption of a system analysis in an organization yields harmonious synergy within the processes engaged in the supply chain network such as procurement, transport, marketing and distribution. System analysis also offers directions on how an organization can put in place its policies, strategies and technology adoption that will enable the business to simplify complex challenging issues. The tool offers interdisciplinary approach involving all the departments of the business growth. The analysis can be categorized into policies targeting the opinion of the stakeholders including the customers and the other middle men involved in the chain. (Ruffa)
The system also includes cost-benefit analysis dealing with comparison of the benefits or profits against expenses involved. The cost analysis will evaluate the operation expenditure in the supply chain processes while the benefit analysis evaluates the earnings in monetary values gained by an organization. This process will influence change in the decisions undertaken in the supply chain. The major objective of system analysis in an organization is to create a problem solving structure. Therefore when effectively applied can bring about an organized way of dealing with dynamic organizational challenges in business. (Management Coaching and Training Services)
Works Cited
Management Coaching and Training Services. The Just-In-Time (JIT) Approach. 2006. Web.
Ruffa, Stephen A. Going Lean: How the Best Companies Apply Lean Manufacturing Principles to Shatter Uncertainty, Drive Innovation, and Maximize Profits, AMACOM (American Management Association) 2008.
Taylor, Michael. The role of transportation in logistics chain.2005. Web.