Title: Inventory reduction using the optimal policy curve approach: a case study

Authors: Omkar Kaushik; Saket Jha; Shikha Kashyap; Ravindra Ojha

Addresses: Department of Mechanical Engineering, The NorthCap University (NCU), Sector-23A, Gurugram, Haryana, India ' Department of Mechanical Engineering, The NorthCap University (NCU), Sector-23A, Gurugram, Haryana, India ' Department of Mechanical Engineering, The NorthCap University (NCU), Sector-23A, Gurugram, Haryana, India ' School of Inspired Leadership, Plot 76, Sector 44, Gurugram, Haryana 122003, India

Abstract: The current trends in Indian automotive manufacturing industry indicate a rapidly increasing socio-technical complexity of its manufacturing systems. The industry is striving to meet the ever-changing behaviour of the market demand. This has led to considerable increase in variety of products manufactured under one roof. Increasing variety requires high attention to control the high inventory levels of parts and aggregates. This paper focuses on understanding and analysing causes of high inventory levels of a leading tier-I automotive supplier and recommending the way forward using a structured methodology. The quality control (QC) tools, the economic order quantity (EOQ) and the optimal-policy curve (exchange curve) approach have been utilised effectively to funnel the key issues and finally optimise the inventory level of the key parts. The application of the QC tools and the optima-policy curve approach has resulted in a healthy 25% reduction of the high inventory in the industry under taken as a case study.

Keywords: optimal policy curve; exchange curve approach; economic order quality; Pareto analysis and cause and effect diagram.

DOI: 10.1504/IJPQM.2019.102424

International Journal of Productivity and Quality Management, 2019 Vol.28 No.1, pp.28 - 39

Received: 13 Dec 2017
Accepted: 19 Jun 2018
Published online: 24 Sep 2019 *

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