Inventory Management Needs An Overhaul

Inventory Management Needs An Overhaul

November 11, 2018

It’s a classic conflict: Operations wants to drive inventory down. Sales and Marketing want excess inventory to satisfy unexpected customer demand and avoid stock-outs.

Modern inventory management software alone cannot reduce excess inventory because of the continued fear of stock-outs. It’s time for some changes in inventory management.

This post is based on the Logistics Management article, Inventory Management 101: Time to step up to the plate, by Bridget McCrea, October 4, 2018 Image source: Noel Hendrickson/Getty Images.

Discussion Question:

1. If safety stock recommendations generated by inventory management technology solutions are ignored, what policy could be implemented to reduce safety stock or dated inventory items at a company like L.L. Bean?

Guidance: Students should review inventory management concepts.  Students should find a retailer and perform a quick internet search on that company.  Ask the students to develop a process to identify categories of retail inventory based on importance to customer satisfaction.  This might include a discussion of ABC inventory analysis.

What should be the policy to reduce safety stock for broad categories based on ABC analysis?  How should Sales and Marketing teammates be involved in setting safety stock policy?  Continue reading

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Hard Brexit May Stop Toyota Production

Hard Brexit May Stop Toyota Production

October 25, 2018

Toyota’s just-in-time production stands at risk with the looming “hard Brexit” in March 2019.

Last year, the Burnaston plant in the U.K. made nearly 150,000 cars, and 90 percent were sent to EU nations.  Normally parts are delivered every 37 minutes but if these parts are held up in Customs in Dover and Calais when Brexit kicks in, production could stop for hours or even months.

Other auto makers express similar concerns and are developing alternatives and contingency plans.


Video Spotlight: Toyota Europe CEO: We face logistics problems in case of hard Brexit


This post is based on The Bloomberg article, Carmakers in Paris Issue Stark Warning on Risk of No-Deal Brexit, by Oliver Sachgua, Elisabeth Behrmann, and Tara Patel, October 2, 2018; and The Newswheel article, Toyota warns “No-Deal” Brexit would lead to unprecedented production stalls, by the editor, September 29, 2018; and the YouTube video, Toyota Europe CEO: We face logistics problems in case of hard Brexit | Squawk Box Europe by CNBC Life, October 2, 2018. Image source: Shutterstock / nito.

Discussion Question:

1. Why is a just-in-time system more at risk with a hard Brexit than a traditional batch-push Continue reading

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Robot Farmers

Robot Farmers

October 23, 2018

The start-up company, Iron Ox, is working to deliver robotically grown vegetables.  They have planted their first robot farm about 25 miles south of San Francisco in a warehouse.  They intend to sell their vegetables to local restaurants later this year, and to supermarkets early next year.

Their first farm is in a warehouse forcing them to use artificial lights, and thus substantial energy.  But future robot farms will be in greenhouses to reduce energy costs.  Their plan is to locate these robot farms close to metropolitan areas.


Video Spotlight: Watch robots grow food without farmers


This post is based on The Daily Times article, Meet the farmers of the future: Robots, by Michael Liedtke, September 28, 2018, and the YouTube video, Watch robots grow food without farmers, by CNBC, October 3, 2018. Image source: Shutterstock / Beros919.

Discussion Questions:

1. What benefits does the use of robotics have for the farm?

Guidance: The biggest advantage is the reduction in labor.  The cost of farm labor is rising, and finding workers is getting more difficult.  Until recently, many of the workers on U.S. farms were not in the U.S. legally. Continue reading

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