Inventory Optimization in Manufacturing Organizations

Inventories totaling 1.7 trillion U.S. dollars represent an opportunity for U.S. manufacturers. This exploratory case study researched supply chain strategies used to manage inventory in manufacturing operations of a U.S. manufacturing company. A mature value chain contained within a single organization using the value chain framework was the basis for this study. Individual interviews conducted with 16 managers responsible for defining and implementing inventory control strategies, and 4 internal users provided primary information for the study. Other sources of information included a value chain map created through the observation of operations, various inventory measurements, and policies and guidelines related to managing inventory levels. An inductive content analysis employing zero-level coding of the interview transcripts identified 4 themes that describe inventory control strategies as economic order quantity, kanban, vendor managed inventory, and process integration. Physical observation of the value chain, review of supporting documents, and analysis of inventory data ensured the trustworthiness of interpreted themes. Findings identified no single inventory control strategy that fit all applications. Findings also revealed that the financial governing bodies\u27 measurements were not the best tools for operational managers\u27 improvement activities related to inventory control. Included are measures providing alternative means to gauge inventory efficiency. With the results of this study, managers may develop effective strategies to optimize inventory and improve material flow. Manufacturing managers improving material flow may promote sustainability of raw materials and business efficiencies through reduced waste, improved environmental conditions, and increased employment opportunities in associated communities