Question

In: Operations Management

Assume an operations inventory control process is failing, and, that its NIL (not in location )...

Assume an operations inventory control process is failing, and, that its NIL (not in location ) error is running at 10%. Assume the problem is based on incorrect receiving processes. What processes should be put in place to solve the problem to drive the NIL to no greater than 1%.

Solutions

Expert Solution

Receiving processes specify the standard set of procedures that are to be followed when new shipments arrive to replenish inventory. If the NIL (not in location) error is high due to improper receiving processes, the following corrective measures may be taken to reduce the NIL error:

  • All incomimg goods must be identified, marked and kept segregated using some identification such a RFID tags, Barcode etc.
  • The goods received must be inspected properly for quantity, lot size, defects, purchase order etc before taking into stock
  • The paperwork and entry into system must be completed as soon as shipment is received and keep record of the same
  • The receipt of goods must be communicated immediately to all stakeholders such as supplier, transporter and any other agency involved in the supply chain process
  • Any goods rejected for any reason must be backloaded immediately after following proper preocedures in order to avoid unwanted inventory and future complications

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