Abstract

Inventory management is a challenging area in supply chain management of any business, especially in the manufacturing or production industry. Organisations need to have inventories in warehouses to fulfil customer demand, meanwhile, these inventories incur holding costs to the organisations. Therefore, effective inventory management is needed to find and maintain the right levels of the inventories that will fulfil the demand without incurring the unnecessary cost to the company and to avoid overstocks.  This paper gives a brief introduction to the concepts of the inventory management, overview of the yarn manufacturing (spinning) industry, a real-time case study of the implementation of effective inventory management techniques in one of the yarn manufacturing mills and the difference observed in the performance of the mill in terms inventory turnover ratio and inventory conversion period, and the reflective analysis of the implementation of the effective inventory management.