Integrated inventory ranking system for oilfield equipment industry
Abstract: This case study is
motivated by the subcontracting problem in an oilfield equipment and service
company where the management needs to decide which parts to manufacture
in-house when the capacity is not enough to make all required parts. Currently
the company is making subcontracting decisions based on management’s
experience.
Design/methodology/approach: Working with the management, a decision
support system (DSS) is developed to rank parts by integrating three inventory
classification methods considering both quantitative factors such as cost and
demand, and qualitative factors such as functionality, efficiency, and quality.
The proposed integrated inventory ranking procedure will make use of three
classification methods: ABC, FSN, and VED.
Findings: An integration mechanism using weights is developed to rank the
parts based on the total priority scores. The ranked list generated by the
system helps management to identify about 50 critical parts to manufacture
in-house.
Originality/value: The integration of all three inventory classification
techniques into a single system is a unique feature of this research. This is
important as it provides a more inclusive, big picture view of the DSS for
management’s use in making business decisions.
Author: Jalel Ben Hmida,
Siddharth Parekh, Jim Lee
Journal Code: jptindustrigg140022
