A manufacturer's inventory levels are growing and service levels are dropping. Which of the following supply chain strategies is most appropriate to reduce inventory and improve service?
A manufacturer's inventory levels are growing and service levels are dropping. Which of the following supply chain strategies is most appropriate to reduce inventory and improve service?
Reducing setup time helps in making production more flexible and responsive. This approach is likely to reduce inventory levels by enabling smaller production runs and quicker changeovers, thus preventing overproduction. It also improves service levels by allowing the manufacturer to respond more swiftly to changes in demand, ensuring better product availability and customer satisfaction. Increasing safety stock, optimizing total cost, or implementing batch operations do not directly address the root causes of growing inventory and dropping service levels as effectively as reducing setup time does.
D. Implement batch operations.
Incorrect. Since inventory levels are rising and service levels are dropping, this means the operation needs to move quicker. The only answer choice that achieves this reducing set up time. Batch processing is slower. https://www.generalkinematics.com/blog/batch-processing-vs-continuous-flow/