Challenges of Mixing Methods and Methodologies

Question: Discuss about the Challenges of Mixing Methods and Methodologies. Answer: Introduction: Inventory flow management is considered as one of the most critical and costly aspect of supply chain management. The companies are rigorously trying to balance the cost of inventory so that it is able to fulfill customer requirements. Storing to many stocks increases the cost of warehouses and attaches with the capital further it also causes loss to vendors if in any case there is a drop in demand. When there is very less or no inside available in the inventory upstream, downstream retailers, manufacturers and distributors cannot give commitment for huge orders with guaranty apart from that these people will also not be able to deliver proper forecast. Inventory management is usually considered as a very dynamic and flexible system which is very sensitive towards parameters of cost and it is been developing throughout years. It is also termed parlance management because supply chain managements deals with material flow control from the raw materials suppliers at one end and delivery of finished goods to the consumers at the other end. The most of these techniques are usually dependent of scientific principles further it's based on mathematical and theories of probability. The inventory management is responsible for various activities like marketing, purchasing, production and other techniques so that it can balance the conflicting tools (Bhasin , 2016) This system is responsible to provide knowledge to manage the flow of materials in an efficient manner, utilize people and equipment effectively and coordinate internal activities. The well managed inventory flow management demonstrates that the customers receive the goods efficiently in proper time. It further allows the members of the team to match the inventory with consumer's demand .Apart from that it is mandatory to meet the objectives of the system including capacity, profitability and productivity. There is some of the basic inventory terms listed:-Cycle stock-It is the basic amount of material required in order to meet the demands of the customer. Transit Stock-It is the reroute among the locations which carry the stock. Speculative Stock-It is basically the extra amount of raw materials required to meet the high consumer needs. It is different than normal short term demand. Safety Stock- It is the extra amount of stock in excess of the cycle stock which is usually maintaine d to compensate the uncertainties of the growing demand and substitution.It can also be expressed through a fixed amount (Coca Cola Journey , 2017) The inventory stock management has a good match with demand and supply further replenishing the requirement of inventory. Various operations such as transporting, manufacturing and warehousing; all these are responsible to generate imbalances in the system which finally gives rise to inventory management especially in FMCG industries. Errors in predicting the consumer demand generally impact the production of the product been produced in the plant. Apart from that changes related to promotional and seasonal impact the consumer demand for any particular product. Hence in these case shortages of the inventory further generate imbalances in the entire system. For eg:- shortage of labor, shortage of transportation.raw materials shortage and capacity of manufacturing constraints ; these all are generally responsible for inventory shortage and the company in such cases is unable to meet demands of the customers (Cahan, 2003) One of the most important parameter of shortage of inventory is scheduling. There are basically three kinds of scheduling problems in the FMCG industries:-First the schedule can be inadequate, second the schedule is not carried out in a proper manner and third the schedule can be disturbed by unexpected scenarios such as bad conditions of weather or breaking of equipments. The efficient inventory management will be trading off the conflicts of operations and constraints of inventory so that it can aim for an effective compromise that maintains enough inventories to meet customer demand yet covers variation in the forecast (Floyd Fowler, 2009) Inventory is very crucial and it very much mandatory but there are other expenditures associated with the same; and the expenditures increases with the increase in levels of inventory generally when indirect and direct cost is indulged. The bigger the inventory, the higher is the possibility of loss by damage, obsolescence, aging and theft. A bigger inventory can result into inefficient handling. It is always recommended to spend ample amount of time in re-warehousing, double handling and stock rotating through man-hours which may have be crucial for some other task. It is very common factor in FMCG industries to carry manufacturing cost of 25% out of the total amount of funds allocated for inventories. Sometimes the expenditure allocated for inventories can be used elsewhere according to the latest requirement of the industry. Thus it is important for the operations to carry out enough inventories so that it can be always updated with its stock so that shortage scenarios can be avoi ded (Green, 2011) The principle of inventory management states that the industrial plant has good amount of production flexibility and capacity and enough area for storage. The basic quantity required for scheduling and planning the receipt of ingredients, raw materials and supplies packaging must be taken into consideration when estimating and calculating finished product requirement, certain patterns of demand , seasonal swings and activities related to promotional might need pre production specific SKU's in order to avoid capacity of production at bottlenecks. But whenever there is pre production of goods there might be less capacity of storage in the production area. In these scenarios there is a shifting of inventory to the distributing centers based on estimated demands. One needs to note that if the required facility has much capacity of constraints or an unbalanced infrastructure then it's mandatory for the team of management to modify the basic inventory process principle (Helfat Martin, 201 4) The FMCG industries basically need to be proactive in nature for product recall. The earlier model of business required traceability from individual stores to distribution centers. The recent survey conducted on approximate 48 industries in FMCG sector states that the primary cause for installing an automated control system and material tracking system is to get real time visibility and accuracy of inventory so that it can efficiently track and trace the system of inventory. Further the report stated that 52 percent of the industries now use bar coded labels so that they can keep a track on their raw materials, goods finished and progress of work. In order to monitor raw materials, finished goods in the current scenario; it is mandatory to avoid accidental shifting of materials. To work in the real ambience the companies require the industry need to instantaneously hold the inventories either on SKU's real time expiration control of inventories .This can prevent the expired inventory allocation from entering the other processes .Hence resulting in downfall in distribution chain (Hutchison Boxall, 2014) The aim of inventory flow management is to match demand with supply on regular time .There are two main methods to manage the flow of inventory most frequently termed as production push and warehouse pull. Production push is regarded as one of the most traditional technique whereas warehouse pull is the new one. At times the system of pull is much suitable to the requirements of the distribution network and beverage industry as it the exact consumer demand the basis for substituting inventory. But for satisfying the demands of the consumers without further interruption a certain quantity of inventory must be send out of the door. In this case the production pull system works very well. Both distribution and production push works very well (Lislie, 2011) In the inventory management production push process the periodic demand estimation is often converted into the production plan and a production schedule. Further the process of push production is further converted into transportation schedule which allocate the amount for transporting to each and every distribution center based on each forecast. In the production push process, the facilities with respect to the production or other elements involving centralized planning generally control and manage the movement of inventory within its distribution centers and location. The push process is generally introduced in the processes during periods of promotion, when the products are supposed to push out of the production area on assigning basis. In the inventory management warehouse pull process, demand forecast is also responsible for the plan of production and modification in schedule of production on the basis of inventory substitution taking into account distribution center (Metcalfe, 2 002) The system of pull in inventory flow management deals with responding to consumer's demand. Here the consumer is considered as a important factor while deciding the requirement, location and amount of SKU's. The push process generally sends out the materials based on the forecasted demands of the market or blanket allocation. The pull system sends out the materials on the basis of the demands of the distribution centers which are directly dependents on consumer's demand. The pull process works under right time principle so that it can conduct quick and frequent flow of info and goods. The cost cutting is usually maintained by replacing waste such as inventory which stays too long or huge amount of safety stocks. The pull system functions better than pull system as it is able to operate and deal with all the complex scenarios of beverage industry by using the technology at optimal level. The pull system of the inventory management is combined with scheduling of production and planning of resource it facilitates the matching of supplies with the actual customer demands within the supply chain again the reversal of planning information from consumers to suppliers (Randolf, 2009) The FMCG industries are making a drastic change by shifting from push system management to pull system inventory management. At the same time there are various factors involved which will lead to success of pull system in future. On primarily basis the industry should have a general knowledge about the pull system .It employees should have a basic idea on operation and estimation during the entire process (Austin Seitanidi, 2012.) Secondly it's important for the cross over to have a proper commitment by the team of management and prior support by members in the senior management. Thirdly there should be introduction of performance parameters so that it can be established within the line of objectives in supply chain management .Fourth, all the locations should have timely and accurate info about the demands and quantities of inventory management. Fifth, an accurate estimating and forecasting system should be established and the sales and operation tem should be liable to it equally. Sixth, parameters of operations such as lead times, cycle times, and capacities are often required to understand production, warehousing and transport. Seventh, it is mandatory to have accurate info and good communication to solve the complexity of business by indulging software system and finally transportation is required for scheduling the systems (Finegan, 2001) The main preference of all the employees in the FMCG distribution and manufacturing is to satisfy the demands of the consumer for production. Controlling and monitoring the inventory is done in order to match the consumer's demand by scheduling the transportation and productions in a way which can decrease the usage of resources in a complex and constant balance. In order to manage the shifting of materials throughout the entire distribution centers and processing unit they usually develop the ability to meet the changing demands of business. This is further integrated with right policies, system and production. The management of processes and technology are usually done on the basis industrial practices and further by effective achieving the balance of inventory flow management. This leads to a company's success in today's challenging time. Managing the entire material transportation efficiently throughout the processing tenure and distribution of proper Inventory management is a crucial part of the "Seamless tube "within any respective FMCG company. The common focus of this sector is on customer satisfaction. The main goal of this sector is to produce good quality goods at nominal rates further packaged and delivered according to the latest demands of the consumers. Proper management of the inventory flow management ensures that every customer and supplier has uninterrupted delivery of delicious and fresh products of the FMCG company. This is also regarded as the greatest form of service delivered to customers. The enti re inventory management basically works on this fundamental. 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