Inventory Management Strategies for i-GEAR's Successful Entry in the Market

The importance of achieving competitive advantage in low cost baggage, trolley and suitcase market

As mentioned above, i-GEAR is planning to make a string entrance to the market with the innovative product. It is important for our business to achieve competitive advantage over the rivals already operating in the market. The baggage, trolley and suitcase market is have lots of competitors operating at different strategic groups. It is not possible for our firm to directly compete with the major players in the market. However, there is a gap in the innovative product low cost baggage, trolley and suitcase market. This opportunity must be captured to ensure successful entrance of i-GEAR in the concerned markets. 

An effective inventory management will naturally bring competitive advantage for the company in terms o reduced costs, higher quality and timely delivery of the products to the end customers (Slack et al., 2013). The major operational goals of inventory management are:-

Reducing waste from production is important for the firm as it helps to trim cost, helps to achieve sustainability goals, enhance overall quality of the product and finally to avoid time spend on managing waste.  Wastes are materials generated after manufacturing process which has no additional use and incur cost if not properly management (Henningsson et al., 2004). Green production and reverse logistics are important strategies to overcome the issue of waste in i-GEAR.

There are always risks and uncertainties during the production and logistics operation of our new business. Avoiding these uncertainties is important to reduce the risk of loss and damage. Risk mapping is an important strategy to overcome this situation in i-GEAR.
 
The sample showed in the figure below will help the business to identify the risks in operation (Grable, 2018).

Throughput is the rate at which something is processed or the rate of production. The use of throughput will enable our machines to work all the more appropriately and complete the occupations a lot quicker than our business needs. The most important measure to improve the rate of production we need to eliminate throughput bottlenecks from the manufacturing process. The second step is to reduce the Parts Rejection Rate from the assembly line. These actions along with improved employee training and use of automation will improve throughput in our firm (Gupta, 2001). 

Cost of quality is a technique used to identify and calculate where and what amount of resources a company uses for preventive efforts and to improve the quality of the product as opposed to the cost arising from internal and external failures. ("COQ | Cost of Quality," 2017)

Major operational goals of inventory management

Cost of Poor Quality are as follows  :

External Failure Cost are the cost occurred as per the product failures after when  they finally reach to customers. These failures will have adverse effect on the reputation f the brand affecting its goodwill as well. Every Organizations aim is to achieve or maintain customer value. Failure to provide quality products in the market will result in diminishing of customers trust. ("External failure costs AccountingTools," 2018).

In my company to withstand the cost of quality, we as a team make sure to reconcile each and every step In our production line to rectify the error in an effective manner to maintain the product quality in every single goods we sell. Also we ensure customer satisfaction for those faulty goods that we receive accepting our fault and offering an upper hand to our customers to maintain their trust. We could also assign a research team  to enchance the quality of our product and determine the major flaws in our production line. 

Internal failure cost are the cost which is related with faulty goods found before the client buys the item. Internal disappointment cost can unfavorably influence amount f the item, increases the wastage which is collected and extends the production time. (Swamidass, 2000, p.10-54)

In my company this failure cost can be handled by designating  skilled and effective workers who can effortlessly distinguish the mistake or flaws during the production. The failure cost can moreover be corrected by Total Quality Management (TQM ), which includes different

concepts to diminish failure and to guarantee all the products are of the most excellent quality. Major internal failure cause  includes : 

• Waste : This incurs when poor communication within the organization , errors and holding stocks affects the production line.

• Scrap : The effective goods that cannot be restored , sold or used is classified under this.

• Reworks : Correction of defective material.

• Failure Analysis :Occurs when specific team assigned for the research fails to comply their duty in an efficient manner. ("Internal Failure Cost," n.d.)

These are cost incurred to avoid quality problems in my company. The strategy of my company is to improve production line by placing skilled labors and training existing employees for enhancement in their line of work. They are planned and incurred before actual operation and they include :

• Quality planning 

• Quality Assurance

• Training ("Prevention costs," n.d.) 

Appraisal cost are the cost that business pay to ensure that their items are free from fabric absconds. These cost are related with the suppliers and customers evaluation of after sales. In my product my company focuses on reviewing the quality and functionality of I-Gear which is a next generation travel case. It is essential that the quality and functionality is upto its mark for setting up the desired price for my product.So it is mandatory that our company needs feedback from our customers and suppliers in order to make a product abscond free. ("Appraisal costs — AccountingTools," 2019)

In order to attain quality of our product I-Gear we can reduce cost of quality by implementing as per the following Total Quality Management concepts :

With the concept of TQM my company targets to eventually lower the unnecessary wastage over production line. By practicing this six sigma, we can effectively increase productivity time with customer value hand in hand. This allows us to reduce external and failure cost. With six Sigma process my company could eradicate unwanted wastage in production line and improve the capability of business. The increase in performance and decrease in process variation helps I-Gear to improve in profits , employee morale and quality of products and services (Rastogi, 2018).

In my company to maintain a moderate and balanced work culture the staff are given tasks and duties to share their ideas and bring out creativity in our work culture. These types f opportunities helps to maintain the success factor of my organization by accepting or considering efficient and effective ideas for organizational growth. This allows them to work freely and discuss the  matters within the organization without any hierarchical barriers. I believe that with great power comes from great responsibility. Through this manner our company could reduce wastage and production line and empower our employees("importance of employee empowerment in the workplace," 2018).