Analysis Of Scientific Glass Inventory Management Finance Essay
Analysis Of Scientific Glass Inventory Management Finance Essay
The products of Scientific Glass include customized and specialized glassware for a variety of organizations such as pharmaceutical companies, hospitals, research labs, quality-control sites and testing facilities. By January 2010, a substantial increase in their inventory balances tied up the capital needed for investment for expansion. The debt-to-capital ratio exceeded the 40% target preventing the company to use their capital in other areas. Also the shipping costs were rising, competitive pressures were speeding up, and certain markets in North America and Europe were becoming saturated which underscored the necessity for capital investment for expanding market opportunities in Latin America and Asia. Moreover, expanding warehousing network increased the inventory levels along with costs, documentation complexities and errors.
The company hired a new Manager of Inventory Planning, Ava Beane, to come up with an effective plan to manage SG’ s inventory without requiring a large capital investment. In order to finance operations in year 2010, SG requires an external funding of $53.8 million. These expenses would further limit the company to use their existing capital in other areas such as research and development and expanding to international markets. To improve customer service levels, SG had increased the target customer fill rate to 99% and added six more leased ware houses to meet the demand more accurately. This led to an increase in the inventory levels as some warehouse managers kept extra inventory in order to meet the company target fill rate.
Good practices
Maintained continued sales growth and higher customer satisfaction
Produced creative products with lower life cycle costs
Focused on durable products, innovative designs and superior customer services
Reduced time between ordering and delivering the products to the customers
Bad practices
Treated inventory management as an
The products of Scientific Glass include customized and specialized glassware for a variety of organizations such as pharmaceutical companies, hospitals, research labs, quality-control sites and testing facilities. By January 2010, a substantial increase in their inventory balances tied up the capital needed for investment for expansion. The debt-to-capital ratio exceeded the 40% target preventing the company to use their capital in other areas. Also the shipping costs were rising, competitive pressures were speeding up, and certain markets in North America and Europe were becoming saturated which underscored the necessity for capital investment for expanding market opportunities in Latin America and Asia. Moreover, expanding warehousing network increased the inventory levels along with costs, documentation complexities and errors.
The company hired a new Manager of Inventory Planning, Ava Beane, to come up with an effective plan to manage SG’ s inventory without requiring a large capital investment. In order to finance operations in year 2010, SG requires an external funding of $53.8 million. These expenses would further limit the company to use their existing capital in other areas such as research and development and expanding to international markets. To improve customer service levels, SG had increased the target customer fill rate to 99% and added six more leased ware houses to meet the demand more accurately. This led to an increase in the inventory levels as some warehouse managers kept extra inventory in order to meet the company target fill rate.
Good practices
Maintained continued sales growth and higher customer satisfaction
Produced creative products with lower life cycle costs
Focused on durable products, innovative designs and superior customer services
Reduced time between ordering and delivering the products to the customers
Bad practices
Treated inventory management as an