Inventory Management Best Practices In Malaysia Manufacturing.

International Journal of Research and Innovation in Applied Science (IJRIAS) | Volume VII, Issue I, January 2022 | ISSN 2454–6194

Inventory Management Best Practices In Malaysia Manufacturing.

Santhirasegaran Nadarajan^¹*, Sitraselvi Chandren², Ezanee Bin Mohamed Elias¹, Kamarul Irwan bin Abdul Rahim¹
¹School of Technology Management & Logistics, Universiti Utara Malaysia, Sintok Kedah, Malaysia
²Tunku Puteri Intan Safinaz School of Accountancy, College of Business, Universiti Utara Malaysia, Sintok Kedah, Malaysia
*Corresponding author

ABSTRACT
Inventory management best practices succumb to how well a company efficiently control the stocks which have repercussion on overall financial position as it is well known as capital assets which may lead to liabilities when poorly manage. This paper shall address some key success factors in managing inventory efficiently and effectively base on the main author working experience more than fifteen years in electronic and electrical manufacturing. The approach of having efficient stock control point reflects how well the manufacturing paying lot of attention to ensure the current capital asset properly been used and replenished at the same time by not keeping too much inventories and having too low as well. This review paper shall be an eye opener for industry players and academic in building knowledge and concept benchmarking the best practices commonly uphold by many manufacturing and add on contribution to research community.
Keywords : Inventory management, manufacturing and best practices

INTRODUCTION
Improving inventory management can be a significant enabler for many sectors especially concerning production organizations for example manufacturing to perform efficiently and effectively in transforming input into output deriving from efficient supply chain. High inventory come with high carrying costs that drain manufacturing operating budgets. Ineffective management of inventory has major implications on both cost and service delivery. In particular, inventory shortages undermine service delivery while excess inventory leads to increased costs. Therefore placing inventory best practices should be the eminent consideration to meet effective service delivery and reducing inventory cost. A key objective of inventory management is to ensure that an appropriate amount of inventory is available to meet set service levels while keeping costs at a minimum. Improvements in inventory management efficiency are linked to better financial performance (Gołaś, 2020). The best practices such as proper record on inventory movement in and out, to carry out inventory stock take annual or bi annual, cycle counting time to time for high value inventory, monitor abnormal inventory such as slow moving and obsolete, frequent trouble shooting on shortages as well on excess inventory, control or monitor on defect stock, all inventory are classified by category, strengthening inventory re-order point and safety stock.

LITERATURE REVIEWS

Reorder Point
Placing an important towards ordering system such as timing for creating order depends on forecast strategies in place and matching with the current outstanding stock will further strengthen the ordering system (Nadarajan, , Chandren, , Abdul Rahim, Radzuan, & Mohd Nawi, 2018). Inventory proper techniques such as economic order quantity (EOQ) will further strive the ordering system effectively. Reorder point take place when the inventory for certain level of critical observe and require immediate replenishment in order to avoid shortage eventually effect production refer to figure 1
Strengthening inventory reorder point subject to inventory level determined by demand pattern captured through effective forecasting strategies in place (Nadarajan, & Chandren, 2011). This could be done if proper navigation through solid system planning consideration should enhance the reordering system effectively. Such system should imply from high consumption inventory base on the peak demand pattern. The order quantity Q refer to figure 1 is the desire level quantity ascertain from the forecast demand on annual basis when it touches at the critical level or the reorder level (R) alarm the manufacturing time for ordering starts immediately especially high consumption inventory. This technique is not workable for slow moving inventory. To be precisely, inventory is carefully planned when the time come for order at this junction reorder level will further strengthen the ordering system effectively (Mohd Nawi, Nadarajan, Ibrahim, & Mustapha, 2017).

Read More