Northcutt Bikes Case Study
1054 words 5 pagesExecutive Summary
Northcutt Bikes is a bike manufacturer and a service provider of bike parts to the many retail businesses that sell Northcutt bikes. Northcutt Bikes has a warehouse that is 95% utilized however they have an order fulfillment rate of less than 80%. This has caused a loss of revenue due to orders being cancelled when needed parts are not in stock. To resolve the problem, we looked at 3 alternatives including establishing pooling groups within the same geographic region, establishing a continuous review inventory management system or staying the course. Our recommendation is to establish a continuous review inventory system that will reduce unnecessary inventory, increase needed inventory and improve service levels. …show more content…
In order to implement this system Northcutt will need to purchase barcode scanners, inventory software, and computer systems (Rovney, 2010). Staff will have to undergo training on the new system. In order to minimize errors, top performers during training should be identified. These top performers will be responsible for monitoring other employees’ use of the system for the first 30 days.
Assumptions, Restrictions and Constraints
The first assumption is that the competitive strength of the company is still developed around customer responsiveness and flexibility and that creating a department focused exclusively on after-market service is still critical to the firm. This is important because a capital investment is going to have to be made in order for Mike Alexander, the new Materials Manager of Aftermarket Service to succeed. There may be staffing issues and we are not sure that the space that was secured is even large enough to hold the amount of inventory needed (95% utilization). This is particularly prudent because the service department is growing so fast. This information will be obtained once the inventory is managed properly. Right now, Mike doesn’t have a clue. In addition to the possible restrictions of funding and the constraints of the size of the building there is the relationship between Mike and