Nissan Inventory Management Theory: The Theory Of Inventory Management

In today’s world of intense competition fuelled by globalization, increasing consumer awareness, and technological improvement, organizations that are keen towards large scale success must at all times hype its service availability as consumers can very easily divert their interests elsewhere (Sharma, 2009). Consequently, managing inventory efficiently has become an important operational weapon for products and service firms wishing to survive the competitive pressures. Most of these firms hold inventory so as to meet their customers’ needs. Inventory therefore constitutes the most significant part of current assets of these firms and because of the relative largeness of inventories maintained by Nissan South Africa, s, a considerable amount of fund is being committed to holding inventory. It thus becomes essential to deploy cutting-edge techniques to manage inventories

The difficulties that are in the theory of constraints are: A very long lead times, A large number of unfulfilled orders in the pipeline, A high level of seldom used inventories or lack of mandatory or relevant inventories, incorrect material shipments due wrong materials order, large and increased amount of emergency orders and expedition levels, lack of customers engagement, absence of control related to priority orders which implies on schedule conflicts of the resources (Goldratt, 2004). The theory emphasizes focus on effectively managing the capacity and capability of these constraints to improve productivity and this can be achieved by Nissan South Africa applying appropriate inventory control practices. Theory of constraints is a methodology whose basis is applied to production for the minimization of the inventory (Cooper,