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Any
type of raw material that company uses or it may work in progress and in which
manufacturing raw material may undergo various type of processing so each
machine inventory they could be inventory which in basically in progress. Maple
leaf business use inventory policies to have impact on their supply chain
performance. They are able to do that because Maple leaf product in inventory
can hold their value over the longer period of time and if we have products to
decrease value over the time than it is difficult to have large inventory.

Maple
leaf manufacturing plant is in mianwali Duad khel Pakistan. The contract out
material are store in near to production plant and they move the cement
products in the form of finished goods from production plant that is almost 205
kanal 10 marla to Karachi warehouse through Pakistan railway. Because Pakistan
railway have cheapest transportation so that’s why company choice this mode of
transportation. Demand and supply is never equal so maple leaf carrying
inventory increase the cost but also increase the responsiveness and also
increase the availability of product. When inventory level is high than company
takes high risk because may be percentage of product sale is not increase. This
will have the impact on business profit margin. Having extra inventory help in
keeping production cost down and also transportation cost down however it will
increase the keeping of inventory cost. On the other hand if the inventory
level is low than inventory cost also decrease and it will create loss on sale.

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Its
depend to manager or company that how much they will take order and how much
they keep in inventory. Safety inventory is very important for company because
how much company keep inventory at back hand. Manager may have decided that how
much inventory to buildup.  Level of
product availability is proportion of demand that can be fulfilled from the
inventory if this is high that mean high responsiveness because large
percentage of demand are fulfill from the inventory but it will increase the
inventory carrying cost. When the inventory availability is low than percentage
of demand will not fulfill from the inventory. Maple leaf carries high level of
inventory because they deal with international market as well as local markets.

Company
carries high inventory because of fulfill the need of customer demand and
company export 607790 ton finished goods to foreign customer in a year so
meeting of this type of demand in a year company build huge warehouses. Raw
material i-e clay, limestone, gypsum, and coal is imported from South Africa
and shifted to main production plant warehouse that is located in mianwali.

Company
improves the in-house efficiency because production plant produces the cement
330 days out of 365 days in a year. Company stored the finished good at Karachi
warehouse because company easy exports the cement to foreign countries customer
and in Karachi warehouse near to port so that’s why company easily handle the
product and they transfer the product through the ship because it’s cheapest
mode  of transportation and company save
the handling cost.

 

 

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