Inventory management in The Tate and Lyle Sugar Company Essay

Inventory management in The Tate and Lyle Sugar Company - Essay Example There are also inventories for goods that are yet to be completely processed or semi-finished goods by different departments of the firm. In addition, Tate and Lyle hold finished good inventories at distribution centers, plant sites and stores to avoid process stoppages. The other important components of inventory for Tate and Lyle are raw materials and finished goods in transit in different locations, away from the firm’s premises. However, whether these inventories are under the jurisdiction of Tate and Lyle depends on the ownership of an inventory at a given time. That is, Tate and Lyle or its dealers/partners may own a finished goods inventory before it reaches the market and end consumers. The other type of inventory important for Tate and Lyle is a spare part inventory, for spare parts used in servicing its sugar production processes. Generally, Tate and Lyle categorises its inventories based on their functions as input, process and output inventories. Under its input in ventories are raw materials, consumables for processing such as fuel, stationary, bolts, and nuts. Others are maintenance items/consumables, packing materials and local purchased items required for production (Twede, 2005). Among process inventories are semi finished production in various stages in different departments such as production, marketing, quality assurance, packing and packaging. In addition, production wastes and scrap, rejections and defectives also form part of the firm’s process inventories (Napolitano, 2003). Tate and Lyle’s output inventories cover finished goods, finished goods in transit, spare parts stocks and bought out items, repaired stock and parts, finished goods with dealers, defectives, rejects and sales returns, sales promotion and sample... This paper aims to establish the economic reasons, for which manufacturing and production firms such as Tate and Lyle and Silvertown still use various types of warehouses, despite the assertion by many theorists that inventory holding is a practice that should be minimised. it is imperative that every business ensures that its inventory is performing optimally at all times, cognizant of the fact that such practices ensure it avoids over or under inventory, which would affect the financial standings of any firm. Because inventory is a dynamic business aspect, it is essential that firms constantly evaluate, monitor, review and plan the internal and external factors of inventory management. In many businesses, inventory management functions are assigned to separate and specific departments made up of personnel competent in inventory control, monitoring, and reviewing inventories. Importantly inventory departments ensure healthy relationship and interface between inventory and procurement, production and finance departments For processing firms such as Tate and Lyle Sugar Company, Inventories refer to all the physical stock that is idle but has economic value. These stocks may be in various forms waiting processing, packing, transformation, use or future sale Inventory management and practices are thus necessary for Tate and Lyle, which is involved in sugar production, trading, sale and service of products. Tate and Lyle hold inventories for speculative purposes, functional purposes and for physical necessities.