The good inventory planning strategy is important to:
- Ensure continuous flow of material and do not hamper production
due to stock of material
- Optimally utilize the space available for storage of materials,
WIP and finished goods and do not hamper man and material
movement
- Properly utilize the capital on hand and do not block the
money
In case of limited inventory, there are below issue:
- Risk of stock out leading to impact on production
- Regular follow up with vendors leading to time waste for
people
- Morale down for people in case of productivity impact
In case of excess inventory, below are the issues faced:
- Blocking of capital which otherwise can be used for other
essential purpose
- Space issue in the facility hampering man and material movement
again impacting the productivity