MEMBERS:

Janella Bunagan
Princess Gayapanao
Kriszia Dianne M. Mauro
Patricia R. Mortera

Princess Isha Pang-odenINTRODUCTION:

Any company that attempts to reduce inventory, its associated costs
and making it easier to know the company's ending inventory brings its own
unique advantages and challenges to the battle. Managing for optimal
inventory levels is a critical objective that requires diligent attention and
daily action to maintain the hard - fought advantage. The results, however,
measured through improved customer service, increase sales, reduced costs,
and ultimately, more profitability, are worth the effort.
Inventory is the raw materials, work - in process products and finished
goods that are considered to be the portion of a business' assets that are
ready or will be ready to use for sale. It represents one of the most important
assets of a business because the turnover of inventory represents one of the
primary sources of revenue generation and subsequent earnings for the
company's shareholders. Inventory is reported on a company's balance sheet
under the current assets category, and it serves as a buffer between
manufacturing

and

order

fulfillment.

In

the

operations

of

business,

encountering frequent misconceptions about inventory planning based on

outdated practices, short - sight thinking or simply inexperience can't be
avoided. Some mistakes in this field or asset are using narrow measurement
performance, having unqualified employees manage inventory, lack of
automation, forecast management without a disciplined process, forcing the
budget, having too many or less SKU's (stock keeping unit), managing all
items the same way, etc.
While most of the attention is focused on sales and production, a great
deal of potential savings is usually overlooked in the management of
warehouse and inventory concerns. This critical component of supply chain
management is one area where a significant improvement in operations can
be effected with relatively little cost, unless additional warehouse capacity is
found to be necessary. Having problems in the inventory can brought

mishaps to the operations of the company or worst, leads to bankruptcy. For

example is the Nike Company. In early 2000s, lack of inventory control led
them to the loss of approximately 100 million dollars in sales. Fortunately,
they were able to bounce back by using a better inventory management
system. If it can happen to one of the biggest companies in the world, it can
also happen to anyone.

1.2

Project Context

For more than 48 years, Uratex remains to be the countrys industry

leader in manufacturing quality foams and mattresses that help everyone
sleep better. As a commitment to excellence, it continues to innovate itself
by using the latest technologies to deliver exceptional comfort and support in
each mattress.
The Uratex promise, to produce high-quality mattresses Filipinos can
afford, began when Robert and Natividad Cheng established the Polyfoam
Chemical Corporation. In its perseverance to pursue this vision, it invested in
world-class research and development to produce high grade foam. The
brand grew to become the most recognized household name in the bedding
industry, making it synonymous with quality.
The Cheng family inaugurated the RGC Group of companies to cater to
the growing demands of other industries. This paved way into offering
specialized foam for electronics and automotive seating. It also embarked in
supplying textile, food packaging, and automotive original equipment
manufacturer (OEM) products. Today, Uratex continues the give Filipinos
comfortable and affordable mattresses with 21 plants nationwide. It also
serves as a key supplier to countrys prominent companies from the hotel
and furniture industry.
One of the problems encountered by the management is the inventory
valuation; there are some instances that the companys inventory results of
production loss because they lack internal control in such a way of manual
counting of goods. Lack of optimization is a common design problem that
makes it more difficult to accurately plan and forecast future inventory
needs. A well-designed inventory system must capture the right data at the
right time to avoid ordering mistakes that result in inaccurate inventory
levels. Optimization is especially important as a cost-control measure in a

manufacturing business, because it functions both to reduce waste and

improve serviceability. For example, an optimized inventory system not only
provides information on quantities of raw materials used in production but
can also identify and account for raw materials that become scrap or waste
during production. This data not only can assist in maintaining accurate
inventory levels but also signal when it might be time to look for another
supplier due to inferior raw material quality.
The traditional approach made a hard time for the personnel in charge to
organize and monitor the changes in the production. A common problem with
an inventory system design is a failure to include methods for crossreferencing the locations of inventory items. Just as its vital for a system to
show whats in stock, its also vital for a system to identify locations.
Misplaced, lost or stolen inventory items can lead to increased labor and
inventory costs and reduced profitability. A design solution can be to
incorporate clearly written standard operating procedures for checking in and
storing inventory items, bar coding technology that identifies an items
location and instituting periodic physical inventory counts
In this study, by using the modern ability of computers and internet,
management can solve some problems using IT solutions that can make the
operation of a company more efficient.
To get an overview, managers should review the following common
warehouse and inventory issues:

Wrong quantity. Having the wrong quantity may lead to stock outages
that will result in lost sales or production. On the other hand, too much
of an item will increase carrying costs and tie up capital in unneeded
goods or materials. A system must be designed to check the accuracy
of checking when receiving and picking out stock.

Internal and external theft. Cases of both internal and external theft
are very common. One tool that may help is the installation of a
sufficient number of high qualities of biometric system. This system is
to be placed in the warehouse and only authorized personnel are
allowed to go through. However, other means must also be devised
since these alone are not sufficient to deter theft.

Since problems and troubles are always present in an organization, it is

possible to minimize those circumstances by the help of IT solutions and
proper usage of a system.