Inventory Management

 

Introduction

Inventory management refers to the process of controlling how materials used in a business are organized and stored controlling the quantities of works in progress and finished products. Inventory management is necessary to a business because it ensures that the business’ tied up investment is stored safely until the time it will be sold or used. Many businesses nowadays invest heavily in inventory management because mismanagement of inventory can result into serious financial problems. Furthermore, businesses have realized that economic conditions change from time to time and, therefore, they have to avoid cases of overproduction and underproduction. Effective inventory management involves maintaining a purchasing plan that can be used to ensure that needed items are availed when they are needed. Apart from taking care of purchases, effective inventory management keeps track of available inventory to ensure that it is used appropriately. With recent developments in business and technology, inventory management has taken a new turn to ensure that it keeps up with new changes that emerge every other day. For this reason, there are companies that specialize in inventory management and offer services to clients who need storage and inventory management services. Thus, Bellman Oil Company and RGIS are examples of companies that offer inventory management services.

The Types of Inventories Managed by Bellman Oil Company

Bellman Oil Company specializes in fluid management as it offers fluid management programs in oil producing companies. The company’s services are characterized by the control of inventory and waste oils, oil analysis and cleaning. On its website, Bellman Oil Company (2014) confirms that control of inventory in the Bellman Oil Company involves the checking of inventory and maintenance of appropriate amounts of production and planning of deliveries. Oil analysis involves the testing of oil to ensure that high production standards are maintained. Control of waste oils involves the control of the levels that are generated from oil producing companies. It also includes the testing of waste oils to ensure that harmful elements are eliminated before disposing. Cleaning services, on the other hand, includes the services that are offered to ensure that high hygiene standards are maintained both in the storage facilities and the plants used in the production of oil. The services offered by Bellman Oil Company are geared towards helping oil producing companies to manage their stored oil, reduce environmental impacts and produce the right product for the market.

Based on its website, RGIS (2014) specializes on physical inventory services to health care and education institutions, defense contractors, automakers, manufacturers, retailers and other businesses. The company’s essential characteristics include the counting, management and reconciliation of inventory data. The company’s counting services involves on-site counts where items are counted physically at the place where they have been stored. In auditing, the company provides third-party counts which may be performed for contract renewals and general regulatory compliance. In providing its services, the company uses Radio Frequency Identification (RFID). This technology enables the RGIS to provide services with heightened accuracy and visibility. The company also offers services that meet the unique specifications of different clients despite the fact that they serve a wide range of customers who have varied needs.

How the Service Design Concepts of Bellman Oil Company?

Bellman Oil Company offers a range of inventory management services that are integrated to ensure that clients’ needs are met. In the controlling of inventory, Muller (2011) recommends to use account managers who are charged with the responsibility of ensuring that proper amounts of inventory are maintained. To carry out oil analysis, Bellman Oil Company works closely with the plant personnel of their clients in the testing of clients’ products in order to ensure that the required standards are met. Wastes are also tested and freed from any harmful substances and then disposed. Moreover, tt should be noted that Bellman Oil Company also assists in helping oil-producing companies to meet specific needs of consumers. Therefore, Bellman Oil Company also carries out “custom Blending” where the different oil products are combined in specific ratios to obtain what consumers exactly need. In addition, the services offered by Bellman Oil Company include cleaning where the plants and storage facilities of their oil-producing clients are cleaned. The cleaning services ensure that there is no contamination of fluids during production and storage.

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As it has been mentioned herein, RGIS offers a wide range of services to a wide range of clients. Therefore, it calls for careful and tactful integration of its service design. The company has adapted a service delivery process that does not interrupt normal business operations of its clients. RGIS combines various services including but not limited to data collection, compliance audits and physical counts. In offering these services, the company uses state-of-the-art technology to ensure accuracy and efficiency. To do this, the company has incorporated the use of equipment in handling inventory. The equipment helps in the process of counting, affixing bar codes as well as reconciliation of inventory data. Furthermore, the use of machines comes in handy in the provision of customized services because it carries out inventory management for different clients who have various products and, therefore, require unique services for their products.

The Role Played By the Inventories of Bellman Oil Company

The inventory management services offered by Bellman Oil Company and RGIS go a long way in improving the performance of the companies that they serve. The companies’ performance improves when there are no confusions in the production process. Besides, with optimal stock levels, the right product mix, minimized costs, wastes and maximized profits, the companies’ efficiency improves. With all these, the companies operate at a point where there are minimal wastage of resources and time. Therefore, it can be said that the companies are operating efficiently. The inventories maintained by the companies also play a big role in ensuring customer satisfaction. Through efficient inventory management, customers are guaranteed a steady supply of goods. The customers also get products that are in good condition because of the proper care they are accorded as they are handled and stored. Therefore, customer satisfaction is guaranteed.

The Types of Layouts Found in Bellman Oil Company

The types of layouts used by Bellman Oil Company and RGIS differ significantly owing to the fact that their services are not the same. Bellman Oil Company deals with oil producing company and, therefore, it has adopted layouts that allow easy handling of oil. The company uses the fixed-position, product, process and cellular layouts.

The fixed-position layout is used in handling large quantities of oil. It is different from product, cellular and process layouts because it is not flexible. However, it saves time and costs when handling large quantities of oil. Product layout is also used in the company because different products are usually produced in the oil industry. Each product is assigned a specific place to avoid confusion. Just like the fixed-position layout, this layout is highly inflexible because changing positions of the plants that handle different products can lead to interruption of processes and storage. The process layout used by Bellman Oil Company involves an arrangement where different oil products are arranged and stored depending on the processing requirements. Just like the product layout, the process layout gives the Bellman Oil Company the flexibility that is required for handling various process requirements. The cellular layout, on the other hand, allows the handling and/or storage of similar oil products together. The advantage of the cellular layout over the fixed-position, product and process layouts is that it does not necessitate the movement of machines that handle the different oil products now and then.

As it has already been mentioned in this paper, RGIS does not specialize in handling a specific line of inventory. Therefore, the company has adopted types of layouts that are highly flexible to allow the company meets the needs of the different clients they serve. RGIS uses retail, warehouse, office and cellular layouts among other. The layouts are based on the type of goods they handle at every point in time.

RGIS uses the cellular layout to handle similar goods from different clients. In this case, the products are handled in a similar way but are labeled to avoid confusion. The importance of this layout is that it enables the company to handle large quantities of goods at any given time. However, the warehouse layout also enables the company to handle large quantities of goods. Just like in the cellular layout, similar goods are grouped together. However, Hugos (2011) notes that goods that are retrieved frequently are placed near the entry. The importance of this layout is that it allows easy retrieval of goods because the arrangement of goods is convenient. The company uses retail layout in retail shops since they are usually visited by customers. This layout is usually done in a way that customers get to see other products and not just what they are looking for. This layout is important because it encourages impulse buying and, therefore, benefits the retail shops. The office layout, however, is quite different from the cellular, retail and wholesale layouts. It is designed to facilitate the easy transfer of information within the premises where storage is done. This layout is important to the operation RGIS because it makes it easy to apply automation.

Metrics to Evaluate Supply Chain Performance of RGIS 

In the face of stiff competition, RGIS and Bellman Oil Company have to be at their best to survive the stiff competition and the ever-changing economic conditions. To evaluate supply chain performance of the two companies, the total cost of ownership and the categorical system approach can be used for performance measurements and metrics. The total cost of ownership approach is appropriate for the two companies because it can help to evaluate services that the companies offer that are not included in the cost structure such as administrative and failure costs. Based on this metric, the companies should make improvements on their design and operations to include better quality administration by employing additional managers. Piasecki (2009) argues that in such a situation both companies must also introduce failure costs where services fail to meet clients’ specifications and expectations. Moreover, the categorical system is appropriate for the two companies as it involves the clients in measuring performance. The companies should also make improvements based on this metric. They should concentrate on the provision of customized services because it will go a long way in satisfying the needs of a bigger number of clients.

Ways of Improving Inventory Management in RGIS

As is has already been mentioned in this paper, any business is bound to face competition, hence, RGIS and Bellman Oil Company are no exceptions. Therefore, the two companies should review continuously their strategies to ensure that they remain competitive. The two companies should put in place robust communication systems. Making such a change cannot interrupt operations because it simply involves the introduction of facilities and equipment that would improve communication within the companies and with their clients. The companies should also put more emphasis on the use of the office layout in their premises. This lay puts more emphasis on automation and robotics and use of U-shaped lines in the arrangement of items. With the expansion in operations, these improvements will facilitate easy storage and retrieval of goods.

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