Inventory Management: A case study at Volvo Construction Equipment
Abstract: • Introduction In today’s world, manufacturing companies are keen to adopt lean methodologies to sustain an everchanging market. One way companies grow their business is by increasing customer satisfaction, customization and running the business in the optimal scenario. Inventories forma significant amount in applicable businesses, estimating around 30%, a number that has the potential to be decreased that would turn direct profits. The following two research questions were therefore answered. Q1. What are the potential factors which affect the inventory size in the lean production facility? Q2. What should be the inventory management approach in a lean manufacturing environment? • Methodology The literature review was performed to get an understanding of the current study on this topic. Further a site was visited, and the case study approach was adopted. While gatheringdata, semi-structured interviews were conducted with engineering, line management and operations. Observation technique was also used to collect empirical data. • Theoretical framework Theoretical study based on literature review helps authors to understand the complete system deeply from a lean perspective as manufacturing takes place in the lean environment. The theoretical framework helps in finding the right approach to the problem and showcases the potentially problematic areas to be focused on. • Empirical data Empirical data shows the actual image of the problem in the case company. It also shows the possible factors that are responsible for the present condition. These factors are represented with the help of the fishbone diagram. • Analysis and results Quantitative analysis was done based on data collected. Two approaches were proposed in which approach 2 answers the problem for sufficient buffer size. Cross-check analysis was also performed on the actual production plan from week 10 and 11 this cross-check analysis strengths the reliability of the research work. • Conclusions and recommendations The conclusion is drawn based on the analysis performed with the foundation of data collected. Although significant challenges are answered with the help of research questions, human involvement and absence of monitoring policy limit the reliability of the proposed results. The future recommendation is to perform the proposed solution on simulation and check the validity of different scenarios.
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