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Research on "Zero Inventory" Purchasing Management of Tianjin Samsung Telecom. Technology CO., LTD

Author: ZhouShengYu
Tutor: WangZuoHui
School: Jilin University
Course: Business Administration
Keywords: zero inventory inventory management supplier evaluation
CLC: F426.6
Type: Master's thesis
Year: 2011
Downloads: 214
Quote: 0
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Abstract

In the new economy era of twenty-first Century, the market situation is being transformed into a buyer’s market gradually, and the trend of global economic integration grows increasingly. The intense market competition and rapid change of market demand makes the new technology life cycle reduce dramatically,which not only requires enterprises to undertake the technology innovates ceaselessly, but also forces the enterprises to face the pressure of shortening delivery time, and to improve product quality and service levels under the premise of lower product price. In this situation, more and more enterprises begin to pay attention to the company’s procurement management. However, how to make a scientific purchase, how to make inventories remain at reasonable levels, improving the capital turnover rate, and reducing inventory management cost becomes a worldwide inventory management research hot spot. "Zero inventory" management thought is generated in such a application demand. It is an extension of inventory management of JIT production in itself, also JIT thought of application in inventory management, an inventory management of satisfying the production flexible and compact demand, of which goal is to maximize the elimination of waste at the minimum of maintaining the producing pace. Now a growing number of worldwide manufacturers think "zero inventory" as an effective way to reduce costs, and the increasingly unique advantage of "zero inventory" are also highlighted in the application process.Tianjin Samsung Communication Technology Co., Ltd., which is a subsidiary of Samsung Electronics Co., Ltd. joint venture with Tianjin Electronic Instrument Corporation, was established in August 2001. The subsidiary which is located in Xiqing District Microelectronics Industrial Zone mainly produces GSM mobile phones, and the products are mainly for foreign markets. From its inception the company followed the Samsung Group headquarters on the production mode of operation, and has been using the "zero inventory" management. With the increasing of parts made in China and the improving of the rate of production year by year, the inventory management model appeared more and more problems and these problems have a direct impact on the company’s overall operating efficiency and the cost of the company’s products. In this paper, it is the research topic of studying the "zero inventory" analysis and optimization of procurement system of the Tianjin Samsung Communication Technology Co., Ltd. After analyzing the theoretical research and application status of domestic and international "zero inventory", focusing on the company’s existing procurement system, the paper found out the existing problems that need to improve in company’s "zero inventory" theory. For these problems, this paper uses the ABC inventory and the modeling method to optimist the company’s inventory management, supplier selection and management, and supplier inventory collaboration with the company’s inventory management. Through more targeted improvement to enhance the level of procurement management of the company.The results show that: (1) at present, the "zero inventory" management approach is widely used by the advanced production enterprise worldwide, the theory of which is the forefront of research. (2) With the "zero inventory" procurement system, Tianjin Samsung Communication Technology Co., Ltd. can integrate effectively internal and external resources to achieve running a good trend with low production costs. But in the application process of the "zero inventory" theory there are many shortcomings for timely improvements, or may affect the company’s growth rate and even survival of the environment. (3) Managing the company’s existing inventory with the method of the ABC inventory classification that will help highlight the key of management and reduce the company’s management costs. (4) Building a comprehensive supplier of comprehensive evaluation index system, classifying and inputting the company’s existing inventory, and quantifying indicators, which will be beneficial to the further standardized and scientific selection and management of the supplier. (5) Establishing a collaborative inventory management system more closely with suppliers. It is more conducive to the company’s smooth production, through optimizing the flow of information and establishing a collaborative inventory management system with suppliers to reduce the producing blindness by suppliers, improve the efficiency of information flow.

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