Why Does Wheeled Coach Have Excess Inventory? Essays Examples

Wheeled Coach is the world’s largest manufacturer of ambulances with thousands of various configurations of the its ambulances. It is precisely the nature of the varied product offer with specific designs and options, which makes it difficult for the company to lead a successful and an efficient inventory. The excess inventory was thus caused by the nature of the business and an inadequate MIS, in this case the material requirement planning system (MRP). The capacity of the company to measure its inventory was thus lagging behind the actual state of production and inventory management. When Lynn Whalen discovered excess inventory and implemented a new level of inventory accuracy, which was permitted by the new MRP system IBMMAPICS MRP, the new system identified the major problem. The problem was related to the denomination of the inventory items as bills of material (BOMs), and therefore some parts that were in the stockroom remained hidden assets. The actual discovery of the excess inventory had permited to renew efforts ensuring that BOMs were accurate and with a certain amount of work the accuracy of BOMs  increased, with the number of engineering change notices (ECNs) decreasing and also improving the purchase-order accuracy regarding to both quantities as well as part numbers ordered was improved. In general, the implementation of the new software helped to department as well as stockroom accuracy, maintaining costs, schedule as well as shipping dates and improving quality.

What kind of a plan would you suggest for dealing with it?

The rapid changes performed by Lynn Whalen led to changes in residual amounts of excess inventory as well as in ambulance design and technology, including customer changes made after the determination of specifications and ordering of materials. While the Wheeled Coach’s throughput time was only seventeen days, many items required much more extensive lead times. The plan that is to be implemented by the management of the company, which had successfully identified serious inefficiencies, is to create a holistic audit of the process in the company since more inefficiencies are to be expected also in other areas. The holistic audit will provide information for further actions to be taken. After the audit, similar processes such as the one undertaken in case of the excess inventory are to be undertaken including purchases of respective modules that might provide more power to the MIS of the company (Waldner, 1992). The purchases of these modules are however to be done only after a thorough analysis of each problem in order to prevent purchases of software that is unnecessary or even software that will be performing in a worse way than the previous one. The knowledge on the improvement potential is to be gathered from competition as well as from the information in the market available and is to be compared with the actual state of the art of the processes. Once successfully implemented, the changes are to be measured, quantified and converted into cost related measures (Wolsey, 2006). After that, business contingency plan is to be drafted which secure the production also in times of distress caused by either failure of human capital or failures caused by production related problems. Last but not least, the implementation of the ISO 9001 is to be taken into account. Not so much as a marketing tool, but also as a tool to increase efficiency of the company in the long run on the base of proven knowledge.

References

 Waldner, J. (1992). "CIM: Principles of Computer Integrated Manufacturing". Chichester: John Wiley & Sons Ltd.
Wolsey, L. (2006). Production Planning by Mixed Integer Programming. Springer.