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Scientific Glass, Inc.: Inventory Management

Annie Chun Chen, Allison Louie, and Helen Xue
by

Helen Xue

on 18 May 2011

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Transcript of Scientific Glass, Inc.: Inventory Management

Scientific Glass, Inc. Annie Chun Chen, Allison Louie, and Helen Xue Company Background OM Problems & SG's Solutions Our Solutions and Recommendations Private, midsize company
2009: $86.3 million in net sales,
$6.5 million in net earnings 3,000 Standardized Products
+
Custom Glassblowing Services Laboratory &
Research Facilities Specialized glassware for Global Scale 3 to 5% annual growth Competition Large Competitors Small Competitors Full range of lab equipment
Specialized glassware Limited range of lab equipment
Broad range of glassware Scientific Glass, Inc. More creative product designs
Lower lifecycle costs 1. Customer Service Levels 2. Customer Responsiveness 3. Inventory Control & Management External etchings
on glassware that
change colors at
different temperatures More industrial quality-control labs Oversaturated North American and European markets More low-end competitors Trends Reduce the amount
of time between Industry 92% Service Level SG Currently 93% Service Level Differentiate by having the highest possible service level Receiving an Order Delivery of the Product SG's Solution 99% 2 Warehouses Waltham, Massachusetts Phoenix, Arizona +6 leases 8 Warehouses SG's Solution Direct Sales Force US & Canada Europe &
Asia Pacific Distribution Sales Representatives Not a satisfying solution since
previous expansion showed little results 1, 2, or 8 Warehouses? Rising shipping costs & inventory holding costs Need to improve warehouse processes 1) Improve order
fulfillment times 2) the # of customer backorders. 3) # of times the sales team needs to
get involved to track down or attempt
to expedite delayed customer orders 4) inventory turns SG's Solution Policy Changes Eliminate Trunk Stock Number of warehouses 1 2 3 Recording
Documenting
Performing physical audits of the inventory Disapproval from salespeople Centralize into 1 warehouse,
2 warehouses, or
8 warehouses: Outsource their order-fulfillment and inventory-control (warehousing functions) What we focused
on solving Part A Part B Reorder Point
Safety Stock Inventory Level
Economic Order
Quantity Based on the Policy for 99%
Service Level We Recommend: Recentralizing the North American warehousing function More shipping fees Insignificant when compared to the amount of inventory cost they will save x8 x2 x8 x2 x2 x2 x8 x8 Pool its inventory & reduce
stand deviation of demand Reduces safety stock they have to carry each order period The End
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