SCHOOL OF BUSINESS

ASSIGNMENT COVER SHEET

STUDENT DETAILS

Student name: LE HOANG VIET ANH Student ID number: M1112015013

UNIT AND TUTORIAL DETAILS

Unit name: BUSINESS OPERATIONS AND LOGISTICS Unit number: 200838 (UEH)

Tutorial group: Tutorial day and time:

Lecturer or Tutor name: PROF. SAKDA SIRIPHATTRASOPHON

ASSIGNMENT DETAILS

Title: REFLECTIVE REPORT #2

Length: 787 WORDS Due date: July 25th, 2021 Date submitted: July 19th, 2021

Home campus (where you are enrolled): UEH-ISB

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signature: LE HOANG VIET ANH

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 The second week of class continues to go deeper into many aspects of operations,
including processes analysis, quality management, planning and inventory management.
These knowledge and skillsets are all very helpful for me, especially inventory
management. Per Krajewski et al. (2019), inventory management is the planning and
controlling of inventories in order to meet the competitive priorities of the organization.
Heizer et al. (2017) has explained clearly the importance of inventory management in the
successful case study about Jeff Bezos and Amazon.com.
Jeff Bezos initial desire is to be a “virtual” retailer only, meant that no inventory,
warehouses and overhead required. However, his revolutionary business completely
changed the way Amazon.com doing business, now they stock millions of items of
inventory in over 150 warehouses around the world and bring to customers the
experience of lowest price, fastest delivery and error-free order fulfillment process
(customers don’t need additional contact with Amazon.com). How did they manage to do
it? Their world-class leader in warehouse automation and management allows the time
to process the package (from receiving to packaging) requires less than 3 minutes of
labor investment (Heizer et al., 2017, p. 527). The case also shares the video of an
Amazon fulfillment center in Lakeland, where Chris Chmura (a reporter) did a facility tour
and was impressed with the technology supporting the inventory management at the
center (as big as 59 football fields). Almost all the processes (from receiving orders to
packaging) were done automatically and in choreography (with more than 1 million SKUs
in the facility) – it showed major investment of the management team on technology and
also increased the morale of the workers (all were proud and happy to work at
Amazon.com). Upon further research, I was also impressed on how Amazon.com has a
designated webpage to explain about inventory management – they call it Inventory
Management 101. In this webpage, Amazon.com shares the definition of inventory
management and the importance of it, follow up by showcasing their way of doing
inventory management. This helps the sellers (or want to sell) at Amazon.com and people
in need to grasp the basic that would support them on their daily work experience. I
believe that all the above cases display the overwhelming competitive advantage for
Amazon.com compared to many other companies in the same industry.

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 During my previous employment at National Oilwell Varco, I had to face many
issues regarding to inventory management. For other competitors, they had their own
warehouse so keeping inventories were not a problem. However, the factor that prevent
us to manage inventories well is that we had to rent space in the warehouse of our agent
(since NOV was a representative office only). The team had to decide between keeping
inventories (paid high rental fee) or moved the products to Vietnam when it’s closed to
operation needs. With the lack of experience at that time, I usually chose the latter option,
which resulted in very tight schedule and sometimes high transportation costs.
Learning about inventory management in the course urges me to master the
concept of balancing between investing in inventory and performing great customer
service. Inventory is a stock of materials used to satisfy customer demand or to support
the production of services or goods (Krajewski et al., 2019, p. 353) and always associates
with costs of keeping it; even for small (inventory holding cost, storage and handling costs,
shrinkage, etc.) or for large (ordering cost, setup cost, transportation cost, etc.).
Therefore, employees should understand the inventory control systems concepts – knows
how much and when the inventory is needed in order to make the most cost-effective
decision. Reflected on my experience with NOV, I should study more on the estimated
costs of keeping inventories at warehouse and urgent transportation to decide which
option is the most suitable to choose, in order to minimize costs and maximize profits.
In hindsight, the concept of inventory management is very important for me to
apply to my working experience. As I am planning to open my own coffee shop in the next
three years, inventory management also establishes my knowledge on the different types
of operational inventories (cycle, safety stock, anticipation and pipeline) and the scenarios
to choose the correct type. Despite understanding about the concept, I understand that
there is gap when managing inventories that mostly related to the financial situation of
the companies. As my previous experience, since we focused too much on saving the
upfront warehouse rental fee, we forgot to calculate and compare the transportation cost,
which sometimes caused the loss on sales. Therefore, I would also aim to have a
profound understanding on inventory management tools, such as EOQ, continuous
review system and periodic review system so I can apply the concept properly.

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References

Krajewski, LJ., Ritzman, LP. & Malhotra MK. (2019). Operations Management: Processes
and Supply Chains (12th ed./global ed.). Pearson Education, Inc. Upper Saddle River,
New Jersey.

Heizer, J., Render, B. & Munson, C. (2017). Operations Management, Sustainability ands
and Supply Chain Management (12th ed.). Pearson Education (Prentice Hall). Upper
Saddle River, New Jersey.

Fox 13 Tampa Bay. (2015, November 26). Behind the scenes of an Amazon warehouse
[Video]. YouTube. https://www.youtube.com/watch?v=Y-lBvI6u_hw
Amazon.com. (2021). Inventory Management 101: Essentials for Ecommerce
Businesses. https://sell.amazon.com/learn/inventory-management.html