Inventory Management of Ford Motor Company and Toyota Motor Corporation
Research two manufacturing or two service companies that manage inventory and write a 5–7 page paper in which you:
Determine the types of inventories these companies currently manage and describe their essential inventory characteristics.
Analyze how each of their goods and service design concepts are integrated.
Evaluate the role their inventory plays in the company's performance, operational efficiency, and customer satisfaction.
Compare and contrast the four different types of layouts found with each company; explain the importance of the layouts to the company's manufacturing or service operations.
Determine at least two metrics to evaluate the supply chain performance of the companies; suggest improvements to the design and operations of their supply chains based on those metrics.
Suggest ways to improve the inventory management for each of the companies without affecting operations and the customer benefit package. Provide a rationale to support the suggestion.
Use at least three quality resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources.
This course requires the use of Strayer Writing Standards (SWS). The library is your home for SWS assistance, including citations and formatting. Please refer to the Library site for all support. Check with your professor for any additional instructions
The specific course learning outcomes associated with this assignment are:
Propose improvements to the inventory management practices of businesses.
Inventory Management Paper
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The automotive industry emphasizes the value of inventories and their diversity. Effective management of inventories is increasingly crucial to guarantee high competitiveness in the car manufacturing sector. Stocks immobilize crucial financial resources while simultaneously creating additional costs at different levels. The value of cost-effective inventory management for automobile manufacturers is of interest to contemporary scholarly endeavors to ensure customer satisfaction while reducing total operational costs. Inventory management entails all activities involving developing and managing diverse inventory levels geared at achieving adequate supplies as well as mitigating costs of under or over stocks. Amid the complexities of the contemporary car manufacturing industry characterized by greater demands in terms of functionalities and costs, it is increasingly crucial to implement the appropriate inventory management system effectively. This paper delineates the types of inventories that Ford Motor Company and Toyota Motor Corporation use, the integration of their respective goods and service design concepts, and the role of inventory in company performance, customer satisfaction, and operational efficiency. The paper also compares and contrasts different layout types, delineates supply chain metrics, and offers recommendations to improve inventory management for each company.
Inventory Types and Characteristics
Inventory for Ford and Toyota companies comprises of production and non-production stocks. Production stocks are all the raw materials that provide the final products after manufacturing. On the other hand, non-production stocks include those that do not reach the manufacturing thresholds but complement the production of automobiles, such as spare parts, packing products, and lubricants. Production stocks for both companies can be categorized into raw materials, finished goods, and work-in-progress (Saliji, 2021). Raw materials constitute raw components and material stocks required to manufacture automobiles. For Ford and Toyota, raw materials include steel sheets, glass, and tires. Sub-assemblies received from suppliers are also conceptualized as raw materials (e.g., pre-assembled seats). Finished goods are the completed products on which all the production activities have been executed and are awaiting sale. For the car manufacturers, finished goods are all certified cars ready for sale after all necessary tests have been performed. Lastly, work-in-progress for the car manufacturers includes all the stock materials on which the company has initiated the production process but has yet to be finalized (Saliji, 2021). Work-in-progress materials cannot be sold for car manufacturers because they have yet to pass other steps (e.g., partly completed cars).
The critical inventory characteristics of Ford Motor Company and Toyota Motor Corporation include seasonality, tangibility, and standardization. The demand for vehicles varies across the year, thus making the production and inventory levels of the manufacturers constantly fluctuate. Ford and Toyota regularly adjust their production and inventory management approach to ensure congruence with demand fluctuation across the year. With