o Scrap or relocate unused obsolesced stocks introduce the lean

O scrap or relocate unused obsolesced stocks

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oScrap or relocate unused/ obsolesced stocksintroduce the lean management(rather than ERP system, because ERP is expensive and also needs rick to do cost-benefit analysis)Results:Reducing 10% purchase costs will increase the profit hugely according to profit-leverageeffectnarrowing vendors;oSavings with new contract – reduction bid (buy more, save more)oManage risk (reputation among current vendors)oLess effort to be relationship with vendorsoMore easier to control lead timeNew Inventory plan;oCost reduction on storage of unused/obsolesced stocksoStock shortage/stockouts to be eliminatedoCustomer lead times to be reducedoInventory turns to be increasedPriorities: Meet supply objectivesoLower costoEase to handle materialsoReputation oElimination on stockouts/discrepanciesoLead time reductionMeet corporates’ strategyoCost reductionoInventory turns increaseBest Conclusion = I recommend reducing vendors and making new inventory plans for specificsof supply plan. Make sure competitive and supply strategies have aligned goal and consist with
each other. In addition, they meet customer’s demand as well and they are focusing more on thefuture and long-term goals.

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