| Summary: | The market place in which Rolls-Royce Energy currently operates in is highly competitive. This means that the management of inventory is becoming ever more important, especially when the life cycle of Energy gas turbine engines can be as long as thirty years which are supported by Rolls-Royce’s aftermarket business.
The purpose of this dissertation is to review and evaluate the management of inventory in Rolls-Royce’s Energy business to determine methods that can be introduced to improve the inventory turnover rate bearing in mind that the company operates an Enterprise Resource Planning system which has standard measures applied that may not necessarily suit all areas of the Rolls-Royce business.
The following practical recommendations to improve inventory turnover within the Rolls-Royce Energy business have been drawn from the research findings and literature review:
• Implement the ABC inventory classification technique to ensure more focus on the parts that generate revenue for the business.
• Implement systems to better manage order quantities in the supply chain to ensure costings are transparent across the whole supply chain. Also ensure that capital is not tied up in inventory that is not going to be utilised.
• Materials that are held for insurance type purposes, which although critical for maintaining customer service levels through speed of delivery, impacts inventory turnover, so assess whether these parts could be better managed by being outsourced. This enables parts to be available at short notice but without the inventory sitting on the books.
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