Inventory Management
Introduction
Inventory management and the supply chain system are one of most important factor for the success of an organization. With the improvement in the technology, the process of inventory management has changed over the time. This research paper mainly studies the inventory management system of two globally recognized manufacturing companies namely Apple Inc and Samsung Electronics. The research paper will study the inventory management system of both the companies and compare them to identify several problems that these companies face in its operations. The paper ends with practical suggestions that would help the companies to improve its inventory and supply chain management.
Types of inventories and essential inventory characteristics
The Apple Inc and Steve Jobs have together created several devices that have left its mark in the world of electronics. Apple Inc has some inventories namely iPod, iPad, Mac Mini, iPad Smart Cover, MacBook, LED Cinema Display, MacBook Air, Macbook Pro, IPhone and iMac. These products have got world recognition because of its superior quality and advanced technology that is delivered by the company. The Samsung Electronics also has several inventories that are smartphones, televisions, music systems, refrigerators and many more.
Both the companies categorize their inventories according to the services provided by them. For example, both the companies have a range of smartphones that are known as iPhone for Apple and Galaxy series for Samsung. Apple categorized its inventories into software segment, laptop segment, desktop segment and many more. Samsung categorizes its inventories into heavy industry segment, consumer goods and many more. Though these segments are used to categorize its final products, the inventory of raw materials is categorized into two segments that are direct inventories and indirect inventories (Beheshti, 2010). Direct inventories are raw materials that are directly used to produce the final products of the companies. Examples of direct inventory are chips and other necessary raw materials. The indirect inventory is the stock of indirect war materials that are used in the production and supply of final products. The examples of indirect inventories are the stock of fuel and other necessary inventories.
Analysis of Integration of goods and services design concepts
In the case of product designing, Apple Inc. has put substantial effort into innovative ideas and concepts. The central concept of product design has been stated as user orientation and performance of the devices. Modern creativity and real revolutionary design of products have significantly reflected the core values of the company (Martinez Ramos, 2004). In the case of Apple Inc.’s design segments, the Corporation has developed efficient production department and flexible supply management chain to stay ahead of the market competitors. The Research and Development department of Apple Inc. has efficiently developed elegant designs, prototypes, and substantial product based experiments to come up with something out of the box. The company always believes in product innovation and as a result, of the same, smarter software and advanced technology can be found in the devices of Apple Company.
In the case of Samsung’s product designing concepts, one must admit that the corporation has invented innovative devices before the introduction of Apple iPhone. After that, the designs developed by the company have found to be similar to that of Apple’s products. After the controversy of product design copyright violation, Samsung has found it difficult to impress the world on regular intervals. On this regard, Apple has successfully captured the smartphone market with the design and software.
Role of inventory
Inventories play an important role in judging the performance of a company. The customer satisfaction and operational efficiency of a firm are directly related to the inventory management of the company. The most important factor in the success of Apple Inc is the complex inventory and products distribution system. Apple Inc is well known for its inventory management and is the market leader for the last four years. It maintains a strategy of supplying as much as inventory that is in demand in the market (Esper & Russell Crook, 2014). It has been seen through the market analysis that about every five days, the company spends its inventory, i.e., the company has an inventory turnover rate of 5 days. It is possible because of the huge size of the distribution place and long schedule of its operations. The distribution center of the company works for 24 hours a day.
If we consider the inventory process of Samsung Electronics, it can be seen that the inventory losses its value at a fast rate because of its low inventory turnover rate. The inventory turnover rate of Samsung Electronics is not competitive in nature. Therefore, most of its customers switch to other companies that supply the product in less time. Hence, it can be said that the satisfaction of the customers is the most important factor in the success of a company. Both Samsung and Apple have implemented new policies to release its products on time, introduce new inventories and improve its services to seek success in this world of global competition.
Comparison of the products’ layout
Products’ layouts can be termed as one of the most efficient sections of manufacturing operations of an organization. In the product manufacturing layouts, Apple and Samsung have made some distinct features for their respective target demographics. To get a competitive advantage, Apple Company has efficiently utilized unique keyboard concepts, awesome touchpad, Retina display screen and sensor responsive high definition screen in the products such as iPhone, iPad, MacBook. Apart from that, the latest iOS software has changed the level of innovation. In compare to this, Samsung has featured some unique specification for their devices such as Galaxy S Plus, Samsung Laptops, and other Samsung Galaxy Series smartphones. In the advanced devices, there are some exceptional features such as proximity sensors, unique layouts of the keyboards, Samsung TouchWiz technology, and AMOLED screen display to catch the eye of the consumers.
In the case of Macintosh computers, Apple Inc. has specifically utilized the Mac OS to provide an exceptional experience to the clients all over the world. The popularity and technology innovation has been critically reflected through the devices of Apple to get the competitive advantage in the electronic market. On the other hand, Samsung has proficiently developed some unique and slimmest smartphones of this era to take out the challenge to the opposition. Widescreen and Wi-fi Chargers of the Samsung devices have created a buzz in the market. Such inspirational product layout can be termed as so professional to impress the global public. Meanwhile, both the organizations have developed their significant and distinct product layouts to attract the global customers. Additionally, the R&D departments of the organizations have continuously working on the innovation prospect to present something more unique and latest to steal the success.
Metrics to evaluate supply chain performance
The supply chain management system must cover the entire cycle of distribution and manufacturing of products. In the case of a developed supply management chain, production, location, delivery channels, supply channels, transportation system, and information channels can play a major role. To improve the level of supply, the organizations must set definite objectives to control the production and delivery channels. According to the supply-demand graph, the inventories must be developed to enhance the production process. In this way, the service level and production cycle can be monitored to decrease the inventory level. As a result of the same, existing production line can deliver sufficient profitability. The particular supply chain metrics can be implemented to improve the performance of the business at the highest level. Professional business organizations have utilized the same model metrics to achieve the success in managing the inventory department.
Suggestion for improvement of Inventory Management
Inventory management is one of essential keys to getting financial support for any organization. Meanwhile, to improve the current inventory management, prompt inventory control strategy must be adopted by the organizations. There are many areas of inventory control management such as minimizing the level of inventory, optimization of the level of inventory and maximizing the inventory level. In the case of minimizing inventory, there is a particular principle that mentions about less inventory status to control the demand. On the other hand, inventory maximization can leave a stock of products to meet the consumers demand. According to the demand efficient inventory model can be utilized to increase the supply-demand chain of the market. In the case of Apple Inc., the organization has effectively managed the inventory turnover to create huge profitability (Priem & Swink, 2012). The efficiency of the inventory management has certainly played an upper hand to the successful operational management of Apple Company.
On the other hand, Samsung has failed to measure the market demand for its products. Therefore, the stock of products has hurt the organizational inventory management. The inventory turnover of Samsung is not up to the mark. Therefore, the cost of maintaining the inventory has increased the worries. To tackle the situation, optimizing inventory management method must be applied to create a significant level of inventory management. The optimizing inventory can accurately predict the demand and control the inventory according to the requirements. Most importantly, the enterprises must reduce the inventory management costs by increasing the level of performance of the applied management policies. The integration of inventory management department must be analyzed to forecast the demand of the target demographic profile. As a result, the supply chain management must be carefully tested before implementing at work to create a better assumption. The trademark style of innovation in the product segment has significantly motivated both the market giants to establish their market worth.
References
Beheshti, H. (2010). A decision support system for improving performance of inventory management in a supply chain network. Int J Productivity & Perf Mgmt, 59(5), 452-467. http://dx.doi.org/10.1108/17410401011052887
Esper, T., & Russell Crook, T. (2014). Supply Chain Resources: Advancing Theoretical Foundations and Constructs. J Supply Chain Manag, n/a-n/a. http://dx.doi.org/10.1111/jscm.12054
Martinez Ramos, M. (2004). Interaction between management accounting and supply chain management. Supply Chain Management: An International Journal, 9(2), 134-138. http://dx.doi.org/10.1108/13598540410527033
Priem, R., & Swink, M. (2012). A Demand-side Perspective on Supply Chain Management. J Supply Chain Manag, 48(2), 7-13. http://dx.doi.org/10.1111/j.1745-493x.2012.03264.x
