For John's technology service business, inventory is a significant aspect of the supply chain management. The role of inventory in John's enterprise will be to manage customers and supplier association which is a key aspect of managing the supply chain. In order efficiently manage the forward and reserve flow within the supply chain, John's technology service enterprise will have to deal with upstream vendor exchanges and downstream consumer needs (Jacobs, Chase, & Lummus, 2014). As such, it is essential for Smith to keep inventory in order to be able to maintain the right back a balance of stock. The key to suitable inventory control is a vast understanding of consumers demand your products. John Smith will have to ensure he had an adequate number of computers, network equipment, and telecommunications circuit which will offer the best possible services for his target market to ensure satisfaction and consumer retention.
Another significant factor to consider is the inventory strategy. According to Jacobs, Chase, & Lummus 2014), an inventory strategy is an everyday procedure to follow for ordering, retaining and handling items in a warehouse. There is a need to employ inventory strategies because of an increase in consumer demand. The appropriate strategy for John Smith is renting adequate space for storing and handling inventory. It is necessary to ensure the inventory is stored in a good warehouse where they can be stored in mint condition ready for sale. The customers will offer particular information to the vendor on particular appliances and the vendor will work to maintain the inventory in a secure warehouse (Jacobs, Chase, & Lummus, 2014). This is referred to as vendor-managed inventory. Vendor-managed inventory will prove beneficial to John Smith because it will minimize the risk of holding inventory.
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For John Smith's business, reducing lead time and improving service levels are significant in ensuring the business is able to satisfy its customers. Lead time as a consequence of reduced response is costly and also threatens customer relations (Kumar et al., 2017). One way to reduce lead time is through implementing vendor-managed inventory since customer inventory will be stored off-site and reduce the time of waiting for such inventory. In order to improve services, it is necessary to look for more effective routes. Owing to the high demand from customers, the company can outsource some work to qualified firms which offer quality services in order to ensure that customers get quality services and there is a fast response time. For instance, offering updates and changes to clients. Implementation of such approaches will ensure that John's technology service business reduces lead time in its operations and improves service levels.
In any business, economic and cost considerations are significant in the decision making process. Economic and cost consideration will border on circumstances and facts which will be taken into account formulating a decision about the distribution of goods or services within a particular geographical area (Kumar et al., 2017). For John's technology service business, it is necessary to employ a strategy which will bring down the cost of operation in order to allow capital to be channeled in areas which are vital for the growth of the company on a global scale. The two strategies employed by the enterprise; outsourcing services to India and vendor-managed inventory are beneficial because they will reduce the cost of operation and at the same time offer quality services to customers and ensure efficiency within the business.
The term inventory management refers to the supervision of inventory (non-capitalized assets), fundamentally the movement of goods from manufacturer to a holding area and subsequent movement to point of sale. From Wild (2017), inventory management is significant because it will help John's technology service business strike the perfect balance of the inventory in the company warehouse. This is the case because it is undesirable to lose sales due to lack of adequate inventory to fill an inventory, having too much inventory, on the other hand, is undesirable because it leads to loss of income. Inventory for John's technology service business includes around –the clock operational support staff, local area network equipment, office space, servers, and connectivity to the internet.
Inventory management is a significant challenge for a lot of companies, notwithstanding, looking at the challenges can be key to solving these issues. The first challenge that John's technology service business faces are deciding who takes significant inventory management decisions so as to maintain cost-effective inventory levels and also ensure quick response and dependable consumer services. Another challenge is computing safety stock levels once every six months so as to ensure the effectiveness of the inventory management (Kumar et al., 2017). Another key challenge is breaking down the present inventory into hardware, software, and other vital technology solutions so as to maintain appropriate levels for each inventory. The final challenge faced by John's technology service business is determining and creating a team that will decide when new inventory has been ordered in order to keep up with the impacts of chief marketing campaigns (Wild, 2017). It is necessary to note that these challenges are recurrent and must be addressed at all time.
Reference
Jacobs, F. R., Chase, R. B., & Lummus, R. R. (2014). Operations and supply chain management (pp. 533-535). New York, NY: McGraw-Hill/Irwin.
Kumar, G. A., Anzil, A., Ashik, K., James, A. T., & Ashok, J. K. (2017). Effective Inventory Management system through selective inventory control. Imperial Journal of Interdisciplinary Research , 3 (6).
Wild, T. (2017). Best practice in inventory management . Routledge.
