Tqm Case

using the most sophisticated radio frequency identification system. For the small business deciding on an inventory management system, choosing the right one boils down to which system holds the most value for the company.

INFORMATION & REPORTS DEMAND FORECASTING STOCK REPLENISHMENT COSTS & FINANCE PRODUCTION MANAGEMENT MATERIAL CHOICE CUTTING & PROCESSING PACKAGING & DELIVERY IT HARDWARE & SOFTWARE PHYSICAL STOCK LOCATION

Figure 1.7 Inventory Management

Business must have methods and procedures that offer ample flexibility to meet unusual and sometimes unreasonable demands on their resources -- personnel, equipment and facilities and operational. Exceptional customer service also includes providing top quality products at

Ordinary control measure. ii. Purchase based on usage estimates. iii. Controls exercises by store keeper. iv. Safety stocks high.

v. Management of items should be done at lower management level.

Table 1.3 ABC analysis

Class Number of items Rupee value in items

A 10% of total items 70%

B 20% of total items 20%

C 70% of total items 10%

Figure 1.9 ABC Analysis

1.13.2 HML classifications (HML-High Medium Low)

The High, medium and Low (HML) classification follows the same procedure as is adopted in ABC classification. Only difference is that in HML, the classification unit value is the criterion and not the annual consumption value. The items of inventory should be listed in the descending order of unit value and it is up to the management to fix limits for three categories.

The HML analysis is useful for keeping control over consumption at departmental levels, for deciding the frequency of physical verification, and for controlling purchases.

This analysis helps to:

a) Access the storage and security requirements.

b) Keep control over consumption of items.

c) Determine the frequency of stock verification of items according to their price (high price can be checked more