Excess inventory

World reactor-related requirements are expected to increase from 57,182 t U in 1992 to about 75,673 t U by the year 2010. Some utiUties are expected to continue to meet their requirements by purchasing or drawing on excess inventory. Annual uranium production should remain below actual requirements until some target level of stocks is reached (27). 

Supply Projections. Additional supphes are expected to be necessary to meet the projected production shortfall. A significant contribution is likely to come from uranium production centers such as Eastern Europe and Asia, which are not included in the capabihty projections (27). The remaining shortfall between fresh production and reactor requirements is expected to be filled by several alternative sources, including excess inventory drawdown. These shortfalls could also be met by the utili2ation of low cost resources that could become available as a result of technical developments or pohcy changes, production from either low or higher cost resources not identified in production capabihty projections, recycled material such as spent fuel, and low enriched uranium converted from the high enriched uranium (HEU) found in warheads (28). 

Good management practice will hold inventories at the lowest possible levels consistent with customer satisfaction and efficient plant operation. Excessive inventories are unproductive and are an investment having httle or no rate of return. Excessive inventories should be maintained only when supphes are erratic or rising in price. Management should normally aim for a high inventoiy-turnover ratio, as given by ... 

Late drawings/technical queries/ tooling delays/errors/shop overload/ out of sequence/overtime/concessions/ shortages/excess work in progress/excess inventory/poor supplier quality/penalty clauses/ lost sales/poor management... 

Note that positive measures can be taken to eliminate the potential for inadvertent mixing such as by storage segregation, elimination of excess inventory, just-in-time delivery, or in-situ manufacturing. If so, then you may be able to significantly reduce the number of potential scenarios that need evaluation. 

Working capital—if the equipment is oversized with regard to the requirement for any particular hne chemical, the interval between two production campaigns becomes too long and excessive inventory is built up. 

The liquid phosgene product is sent directly to the downstream process without intermediate storage. Safety issues with storage of phosgene preclude holdup between process units and the high reliability of the phosgene process avoids the necessity for excess inventory [1]. 

As previously mentioned, JIT is a production system that dynamically seeks ever-higher performance levels. Elimination of waste and defects is an important goal in this regard. Indeed, to achieve true just-in-time, all parts must be defect-free, as there is no excess inventory to draw upon for replacement. To achieve defect-free production, JIT production systems emphasize continuous improvement and utilize autonomation and other related techniques for assuring quality at the source. 

The implementation of CMMS and EAM will include an inventory system that totally supports the requirements of maintenance and the storeroom. Maintenance inventory wfll be managed to ensure that the right part is available at the right time without excessive inventory levels. Information from aU available sources will be used to determine optimum stock levels. A continuous review of stock levels will be made to eliminate excess inventory and obsolete parts. Inventory reductions will be achieved through more partnerships with suppliers and vendors that establish joint commitments to purchase based on responsive service and fast delivery. Positions within MRO material management and procurement wfll increase in their importance and level of technical knowledge to perform effectively... 

Reduced storeroom inventory A CMMS provides the means for more effective management and control of maintenance parts and material inventories. Information for decisions on inventory reduction is readily available to identify parts usage, excess inventory levels, tmd obsolete parts. 

The manufacturing process in make-to-stock firms traditionally produced and supplied product to the distribution channel based on historical forecasts. Products were pushed through the plant to meet a schedule. Often the wrong mix of products was produced, resulting in unneeded inventories, excessive inventory carrying costs, mark-downs, and transshipments of product. 

When managers want to cut costs they first look for supposedly nonessential activities or resources, such as training or excessive inventory of spare parts in the warehouse. Reducing expenditures on such activities and resources certainly leads to short-term cost reductions. However, over a longer period of time these cuts can create unsafe conditions. In Lessons from Longford Hopkins notes that cuts in the maintenance budget played a major role in that disaster. 

A connection should be installed between Tank T-101 and the adjacent Tank T-102 so that excess inventory of chemical RM-12 can be stored in T-102 while P-101 is being repaired. 

In the example, the Initiator is proposing that another tank, T-102, be used to stoe excess inventory of RM-12 while P-101 is being repaired. Other potential solutions include ... 

Consider the in-stock availability offered to the customer (with a nearly zero lead time) by the retailer if the retailer and manufacturer were to carry inventory. It is clear that the retailer s choice of inventory would reflect retailer margins and costs associated with excess inventory. Such a choice of customer service level may not reflect what is best for the overall supply chain, something that is discussed in the chapter on coordination. Thus, a focus on availability will encourage the manufacturer and retailer to establish coordination agreements that can increase the delivered service level to the customer. 

In all the examples discussed until this point, the manufacturer chose capacity and thus absorbed supply chain risk. Consider the case where the retailer has to order ahead of observing demand (i.e., at time L before the start of the season), while the manufacturer produces this certain order. The retailer thus absorbs all demand risk through its choice of inventory. Given that demand is variable, this demand risk manifests itself at the end of the season through either excess inventory that has to be salvaged or shortages that generate opportunity costs. 

However, excessive inventory of inflammable, dangerous, toxic items shall be minimised. 

The traditional techniques used by Valvex for making production schedules are based on meeting forecasts or reaching preset inventory levels. Frequently, large batch orders are processed at each department based on the workflow, and materials are pushed to the next department after the jobs are finished. This type of flow usually causes excess inventories, long cycle times, and some non-value-addedactivities.Evenafterimplement-ing the e-SCM system, these issues were not fully resolved. However, these issues can be tackled by... 

Does the concept of market mediation apply to functional products The answer is, Certainly. Inventory carrying cost is a market form of mediation cost. Excess inventory, like the hedging we described earlier, adds costs that are seldom captured. 

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