The Need for Implementation of the Inventory Management System at the Modern Enterprises

By Gunicheva, Elena L. | Journal of Organizational Culture, Communications and Conflict, December 2016 | Go to article overview

The Need for Implementation of the Inventory Management System at the Modern Enterprises


Gunicheva, Elena L., Journal of Organizational Culture, Communications and Conflict


INTRODUCTION

The condition and efficiency of production inventory usage as the most significant part of the working capital is one of the main conditions for the successful activity of the enterprise. The development of market relations defines new conditions of their organization. Inflation, payment defaults and other crisis phenomena force the company to change its policy in relation to the inventories, to look for the new sources of revenue, to study the problem of the effectiveness of their use. Therefore, all possible ways of rational use of resources, one of which is to determine the optimal value of inventories, gain more and more importance for the company. (Federal Law dated February 8, 1998)

METHODS

The research methods were the analysis of the works of foreign and domestic authors, the analysis of the documentation of the modern enterprise, integrated nature, statehood and reasonabless.

Inventory management is the inventory condition control and decision-making aimed at saving time and money by minimizing the costs of inventory maintenance, necessary for the implementation of a continuous production process and for the achievement of full sale of the finished products.

RESULTS

The urgency of the problem of enterprise inventory optimization and effective management is due to the fact that the inventory condition has a decisive impact on the competitiveness of the company, its financial condition and financial results. It is impossible to ensure a high level of product quality and reliability of its supply to the consumers without the creation of an optimal value of inventories of the finished products and inventories of the raw materials, materials, unfinished products and other resources needed for a continuous and smooth operation of the production process. The understated inventories of material resources may result in losses associated with a downtime, with an unmet demand, and hence to a loss of profit. On the other hand, the accumulation of surplus inventories binds the working capital of the enterprise; both a significant presence of inventories and their insufficient quantity cause the economic damage. In this regard, special importance is gained by the creation of methodological tools, enabling to quantify, analyze and forecast the various options for the formation of the inventory management system. (Alesinskaya, 2010)

The condition and efficiency of production inventory usage as the most significant part of the working capital is one of the main conditions for the successful activity of the enterprise. The development of market relations defines new conditions of their organization.

Therefore, all possible ways of rational use of resources, one of which is to determine the optimal value of inventories, gain more and more importance for the company.

The logistics inventory control system should be designed in a modern company with the aim of continuously providing the consumer with any kind of material resources. This goal is achieved by solving the following tasks:

--accounting of the current level of inventories at the warehouses of various levels;

--determination of the amount of guarantee (insurance) inventory;

--calculation of order size;

--determination of the time interval between the orders.

In order to identify the most prioritized products, as well as to structure the range of products according to their degree of participation in the company's earnings, we hold the ABC-analysis. The key moment of the ABC-analysis is in the Pareto principle: attention to the 20% of the factors enables to control 80% of the system.

It follows that it is necessary to carry out a systematic analysis to structure the various business aspects according to the level of significance for the company. It makes no sense to invest in the efficiency increase across the board, since many of them will not give the desired result, and some will require additional efforts. …

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