INVENTORY CONTROL AND MANAGEMENT

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Case Study to know inventory management of any production firm in Agra : 

Case Study to know inventory management of any production firm in Agra Presented by: Pankhury Tyagi(034) Shilpi Mittal(046) Shushant Vashisth(048) Shweta Singh(049) Vivek Kr. Gupta(058)

INVENTORY CONTROL AND MANAGEMENT: 

INVENTORY CONTROL AND MANAGEMENT (POSING EXAMPLE OF Mc DONALDS )

DEFINITION : 

DEFINITION INVENTORY CONTROL CAN BE DEFINED AS THE STOCK OF GOODS COMMODITIES OR OTHER RESOURCES THAT ARE STORED AT ANY GIVEN PERIOD FOR FUTURE PRODUCTION.

BENEFITS OF INVENTORY CONTROL: 

IT ENSURES ADEQUATE SUPPLY OF MATERIALS, STORES, SPARES ETC. IT REDUCES INVESTMENT IN INVENTORIES, INVENTORY CARRYING COSTS AND LOSSES DUE TO OBSOLESCENCE. MATERIALS ARE MADE AVAILABLE AT THE MOST ECONOMILCAL RATES. PRODUCTION SCHEDULE AND DELIVERY DATES ARE MAINTAINED. THERE IS AN INCREASE IN OVERALL EFFICIENCY OF THE ORGANISATION. BENEFITS OF INVENTORY CONTROL

CASE STUDY OF INVENTORY MANAGEMENT IN Mc DONALDS: 

CASE STUDY OF INVENTORY MANAGEMENT IN Mc DONALDS

The McDonald’s System – the World’s Best QSR experience: 

The McDonald’s System – the World’s Best QSR experience World Market Leader in the QSR area (Quick Service Restaurant) Franchise System (72%) System employees : 1 .6 m illion Customers Per Day : 4 7 m illion Corporate Strategy: QSC&V: Q uality, S ervice, C leanliness and V alue Ray Kroc: “None of us is as good as all of us” Plan To Win -> Successful business revitalization Growth by getting better

2006 results: 

Sales 2005 / 2006 Franchised and affiliated sales: $ 33,137 / 37,065 Company-operated sales $ 12,795 / 14,224 Total system-wide sales $ 45,932 / 51,289 Restaurants Franchised restaurants 18,132 / 18,248 Company-operated restaurants 8,959 / 9,212 Affiliated restaurants 4,038 / 4,101 Total system-wide restaurants 31,129 / 31,561 2006 results

2006 results: 

Restaurants 2005 / 2006 Total 31,129 / 31,561 United States 13,609 / 13,673 Canada 1,339 / 1,362 Europe 6,186 / 6,287 Asia/Pacific, Middle East & Africa 7,375 / 7,567 Latin America 1,578 / 1,607 Partner Brands 942 / 1,065 Boston Market 637 / 656 Chipotle 305 / 409 2006 results

HISTORY: 

They had a different approach to inventory management wherein they used to pre-cook a batch of hamburgers and sit under heat lamps. It used to keep them under the lamps for as long as possible and eventually discard whatever they couldn’t sell. Hence customers couldn’t enjoy freshly made food. The only way it could happen was by the customer giving a special order. HISTORY

PowerPoint Presentation: 

Hence McDonalds moved to the JIT system of inventory management. This shift was possible because of the new burger making technology that enabled them to make burgers faster and keep the time between placing an order and receiving it as soon as possible. This results in the finished product sitting in the inventory for as little as possible. This enables proper inventory management and reduces wastage while giving maximum satisfaction to the customer.

ABOUT JIT SYSTEM: 

ABOUT JIT SYSTEM ( JUST-IN-TIME INVENTORY SYSTEM)

DEFINITION: 

JUST IN TIME PURCHASE OF MATERIAL OR GOODS IN SUCH A WAY THAT DELIVERY OF PURCHASED ITEMS IS ASSUMED BEFORE THEIR USE OR DEMAND. DEFINITION

ADVANTAGES OF JIT PURCHASING: 

INVESTMENT IN INVENTORY IS REDUCED BECAUSE MORE FREQUENT PURCHASE ORDERS OF SMALLQUANTITIES ARE MADE. CARRYING COST IS REDUCED AS A RESULT OF LOW INVESTMENT IN INVENTORY. A REDUCTION IN NUMBER OF SUPPLIERS TO BE DEALT IS POSSIBLE. ONLY PROVEN SUPPLIERS WHO CAN GIVE QUICK DELIVERY OF QUALITY GOODS ARE GIVEN PURCHASE ORDERS. QUALTY COSTS SUCH AS INSPECTION COST OF INCOMING MATERIALS OR GOODS, SCRAPS AND REWORK COSTS ARE REDUCED BECAUSE JIT PURCHASING ASSURES QUICK AND FREQUENT DELIVIERISES OF SMALL SIZE ORDERS WHICH RESULTS IN LOW LEVEL OF INVENTORIES CAUSING MINIMUM POSSIBLE WASTAGE. ADVANTAGES OF JIT PURCHASING

COMPANIES FOLLOWING JIT SYSTEM: 

Mc DONALDS SUBWAY PERKINS (U.K.) TATA CONSULTANCY SERVICES WIPRO TECHNOLOGIES , PIZZA HUT, BURGER KING, TACCO BELL, ETC. COMPANIES FOLLOWING JIT SYSTEM

REFERENCES: 

www.google.com REFERENCES

THANK YOU : 

THANK YOU 