An Empirical Study on Inventory Optimization Process to Reach World Class Performance and Improve Service Quality

In an organization, which has a vast variety of parts, to be delivered worldwide customers, Inventory is a very essential thing that has costs and needed in a first place to be manage correctly and efficiently. Difficulties arises in managing inventories, when the balance between acquisition and procuration is not withheld together. The network between the manufacturer, supplier of the parts, and distributor, in our case the organization itself that delivers the parts to the customers, plays a key role achieving the goal. It has a very strong impact on complete supply chain procedure in an organization. The simplest supply chain networks can be of one single unity that maintain both, manufacturing and delivery. This scenario is more common for a small company. An organization that is committed to provide a global business, like Voith, has to deal with the more complex supply chain network that also scattered around the world. Such a complex supply chain network faces more difficulties in managing inventories because the inventories are also piled up at various location. And due to some incapable and costly mode of transportation, it is not feasible to bring them in central location. Over a period of time either these stocks are forgotten, or hoary and dateless or they are of no need in new business build in an organization. Maintaining these type of inventory is directly associated to company's capital. Sometimes in the definition of lean management, inventories can be count as MUDA (waste), because they are not beneficial to the organizational growth. Hence the optimization process will be introduce for the reduction of inventory. Steps need to be taken to minimize the further piling up of inventory and policies have to be reconsidered for further measures. Reduction in inventory then finally leads to the productivity growth and its service quality. This thesis comprises of all the process steps that were taken to reduce the inventory of Voith Turbo in the 3 region namely AMERICA, APAC and EMEA. Germany's location, Heidenheim, is the central warehouse for all the trading done between the region's Marketing Companies (MCs) and the customers around the world