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Research on the Zero-Inventory Management of Ship’s Spare Parts on the Principle of JIT Purchasing

Author: PeiXueBo
Tutor: ZhaoGuoJie
School: Tianjin University
Course: Business Administration
Keywords: Zero-Invenrory management JIT-purchasing Ship’s spare part logistics Supplier Management
CLC: F552.6
Type: Master's thesis
Year: 2008
Downloads: 429
Quote: 1
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Abstract


Logistics is honored as the third profit source after natural resource and human resource. As an economic activity, it plays an indispensable role in modern society in the realizing of time valve and space valve of commodity. At the same time, creating logistics valve is costly. Logistics is not only the prerequisite of production, but also can help enterprise increase profit and gain advantage in competition through cost cutting.Spare parts logistics is part of enterprise logistics, but it has some distinct feature from common commodity logistics: Firstly, spare parts have limited selectivity, and the flux of spare parts is minor accordingly; secondly, the life span of spare parts is longer than that of equipment.Spare parts logistics is indispensable to the normal operation of enterprise in spite its minor flux. Cosco Bulk Carrier Co, LTD is a state owned large-scale shipping company, which has more 100 vessels under its control. To guarantee the safely and efficiently operating of the vessels, the supply of spare parts must be accurate and timely. The shipping company can establish its own spare parts center, but keeping the spare parts inventory will incur investment on warehouse, spare parts and other handling equipments. The shipping company has to pay for the taxes, insurance and storage fee, and the spare parts can damaged if ill-managed.Zero-Inventory Management is adopted by many enterprises as a new managing method. The core idea of Zero-Inventory Management is to try one’s best to cut down the inventory until the inventory is eliminated, and the essence of Zero-Inventory Management is JIT(Just In Time) purchasing. JIT purchasing can cut down the inventory enormously, but its requirement for supplier is higher at the same time. To realize the goal of Zero-Inventory Management, it is paramount to select the suppliers and evaluate them with scientific standard and procedure.With the help of satellite communication technology and SMIS (Ship Management Information System) software, the department of ship management can realize real time supervision and management of the oceangoing vessels. The safe inventories on board insure that the vessels operate safely and efficiently. The information mode of supplier-ship management department-ship improves the information exchanging efficiency greatly. The supplier-ship logistics mode not only realizes the goal of Zero-Inventory Management, but also save a lot of expenditure on transportation. At the same time, the continuous evaluation of suppliers lays a strong base for the Zero-Inventory Management.

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CLC: > Economic > Transportation and economic > Sea transport and economic > Waterway transport economics > Corporate organization and management
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