Impact of Inventory Optimization On Organizational Supply Chain Performance: A Case Study on Toyota Indus

Abstract

In past few years industries are getting aware of the importance of effective supply chain management and it is becoming an important factor for the success of business. Supply chains exist in both industries whether you are a service providing company and giving services to your customers such as Telco industry or you are manufacturing company and you are providing customer with useful products such as Toyota Indus providing automobile to customers. SC is identified as the network involving different such features that perform different activities such as managing inventory of raw materials from different suppliers, then transformation of these raw materials into finished product or service, then distribution of finished product or service to distributers and retailers and finally to customers. This research aims to analyze the impact of inventory optimization on organizational supply chain performance, particularly in the context of Toyota Indus. Toyota Indus can get to know the impact of inventory optimization like holding cost, ordering cost and raw material cost on organizational supply chain performance. Toyota Indus has mainly seen a decline in its supply chain performance in previous years. Therefore, through analyzing the impact of these factors, Toyota Indus can make effective plans to improve its supply chain performance. With the help of this research, Toyota Indus can identify that if these factors make positive impact or negative impact on supply chain performance. For doing this research, the quantitative research strategy has been used. 137 employees and managers of Toyota Indus have been contacted. The participants have been provided with the questionnaires. The reason why questionnaire strategy has been used in the given research is that this approach is less expensive. This particular study is based over positivism approaches. In positivism philosophy, social realities are involved in the research. The basic rationale why positivism research philosophy has been used is that it basically help in the deeper analysis of research issue. The vii analysis of the given research reveals that Within Toyota Indus, raw material cost is identified as having some importance in the process of manufacturing. Raw material cost is considered more linked with the cost of manufacturing. Within Toyota Indus, effective monitoring of raw material is considered significant. Within Toyota Indus, it is significant to target on the management of cost of raw material, because of the reason that it has direct link with production cost. The response of the participants suggest that within Toyota Indus, it is known that the management of raw material cost is very important, as it is directly linked with the production cost. Holding cost is also seen more linked with inventory cost. The analysis also suggests that the decrement of holding cost is an important strategy of supply-chain management. The analysis has identified that there is no such strong connection of effective management of holding cost with the organizational revenue. The focus should also be done over paying staff with the purpose to make these capable of selling inventory, for reducing the holding cost. According to the managers and employees of Toyota Indus, Toyota Indus is capable of fulfilling the altering requirements of consumers.