Defining the Future of Integrated Supply Chains and Inventory Management Term Paper

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Factory Floor Automation and Inventory Control

Enabling greater integration between the factory floor, suppliers, quality management, production planning, accounting and the executive management teams leads to greater accuracy, clarity and consistency of reporting, and high performance over time. Being able to quickly assimilate, aggregate and analyze shop floor inventory data then translate it into financial metrics is key to any company's long-term growth. Add in the time pressures of semiconductor and computer equipment industries and the urgency to create a unified view of shop floor inventory positions exponentially increases (Alexander, 2001). These and other findings are provided in the article Factory floors go online -- pioneering manufacturers close the final gap in their supply chains (Alexander, 2001). One of the most interesting key take-aways from this article is that only 11% of all manufacturers are actively trying to integrate the many shop floor and inventory management systems to the large-scale Enterprise Resourcing Planning (ERP), pricing, Manufacturing Execution Systems (MES) that have in many instances been installed for decades. The many benefits of having inventory control online in real-time from the factory floor to the top floor of a manufacturer including all departments that also rely in inventory data can be seen in the results Lexmark achieves (Alexander, 2001) in addition to Toyota and their highly customized and very effective Toyota Production System (TPS) (Steele, 2001).

The intent of this analysis is to evaluate the many benefits of having inventory control on the shop floor, running in real-time, providing aggregated feedback on manufacturing performance. MES systems integrated with ERP and financial reporting systems are also capable of interpolating inventory data and creating a highly effective dashboard for senior management to also use in managing manufacturing.

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The integral role of inventory data across the entire supply chain is essential for reducing lead time and performance while accelerating time-to-market (Drickhamer, 2001).

Assessing the Benefits of Having Inventory Control on the Shop Floor

One of the most interesting aspects of manufacturing operations is that the larger they become, the more the assumption base of just what customers expect and how they expect it -- basically their expectations based on experiences -- gets amplified throughout a manufacturers' value chain. This is especially evident in how Toyota had constructed the Toyota Production System (TPS) to reflect customers' perception of time-to-market and especially quality, which is reflected in the many uses of Six Sigma in the TPS process (Dyer, Nobeoka, 2000). Integral to the success of the TPS approach to onboarding suppliers, defining supply chain collaboration workflows and creating inventory management and alerts-based messaging is the idea of having inventory minimized and a catalyst for customer fulfillment, not a roadblock for it (Dyer, Nobeoka, 2000). Dyer & Nobeoka found that inventory and production ata shared across an enterprise can become more valuable that dollars saved from pushing suppliers for lower prices (2000). What the researchers found was the experience effect of inventory data, where the greater its accuracy, clarity and velcoi8ty shared throughout an organization, the greater its value becomes -- eventually become so significant it could be quantified in dollar terms (Dyer, Nobeoka, 2000). These findings from Toyota further support the accumulative effects of having Lexmark engineers capable of tracking the specific performance of quality levels for inkjet replacement cartridge production (Alexander, 2001).

Managing inventory levels is a multidimensional challenge for any manufacturer however. Creating.....

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