INVENTORY MANAGEMENT Term Paper Example | Topics and Well Written Essays - 1500 words

INVENTORY MANAGEMENT - Term Paper Example Kraft was founded in 1903 and currently operates in the United States and Canada. Pepsi Company manages three types of inventories. These are: raw materials, work in progress and finished goods. Kraft Foods Company maintains two kinds of inventory: raw materials and finished products. Raw materials comprise unprocessed items to be consumed in the production process. Raw materials also include purchased components that will be used in making the finished product. Work-in-progress comprises partially completed merchandise in terms of raw materials, costs and labor. Finished product include merchandise held by the company that is readily available for sale (Olson, 2011). How Pepsi and Kraft Foods goods and service design concepts are integrated Pepsi Company employs a vendor managed inventory system to integrate goods and service. The design manager is responsible for hands on design and design management of branding and packaging. The supply chain managers play an active role in the in ventory optimization to address the factor of variability in supply of key commodities and seasonal variability in consumer demand. The supplier assumes the responsibility for management of a retailer’s inventory. Kraft Foods Company owns the product until it crosses the checkout counter. The grocery store acts as the broker between the producer and the consumer. The managers of both companies along with other employees integrate products design by identifying customer needs, generation of product concepts, prototyping and design-for-manufacturing. The role of inventory in Pepsi and Kraft foods performance, operational efficient and customer satisfaction Getting a product or service to the right place at the right time in the modern business remains a challenge, as most businesses have to grapple between the cost of maintaining huge inventory while operating efficiently and effectively. Pepsi maintains a stock of inventory up to a period of twelve days (Hieber, 2002). At the same time, Pepsi Company employs an N-tier demand management, which is a classic bull-whip. N-tier demand management seeks to further suppliers from customers as far as possible. An N-tier demand management helps the company and suppliers to see the final consumer demand at the same time (Radhakrishnan, 2001). Kraft Food Company adopts just in time mode of inventory, where the company makes just the right amount of products for the market and gets them quickly into the consumers’ hands, thus customer satisfaction. By keeping inventory at the lowest, Kraft Foods Company operates efficiently as low level of inventory helps in freeing up the cash. In turn, this results in operational efficiency. Similarities and differences of 4 different types of layouts and the importance of the layouts For an organization to have a successful manufacturing unit, it is pertinent that special care and attention is given to the layout of the facility (Radhakrishnan, 2001). Facility layout refers to the arrangement of diverse components of manufacturing in a suitable way in order to produce preferred production outcomes. Both Pepsi Company and Kraft foods operate four different kinds of layouts. Among the four, three kinds of layout operate in a similar manner. These layouts are: the fixed position layout, hybrid layout and the cell layout (Olson, 2011). The cell layout seeks to lessen the complexity of process and product layouts. A cell layout divides resources