How does Hyundai keep their inventory lean, when they have to maintain stock to
ID: 470555 • Letter: H
Question
How does Hyundai keep their inventory lean, when they have to maintain stock to accommodate their new 10 year warranties? That’s a lot of of parts to be in a warehouse or distribution center, let’s assume people do not have issues with their vehicles for 8 years or so, what do they do with all these supplies? How does Hyundai keep their inventory lean, when they have to maintain stock to accommodate their new 10 year warranties? That’s a lot of of parts to be in a warehouse or distribution center, let’s assume people do not have issues with their vehicles for 8 years or so, what do they do with all these supplies? How does Hyundai keep their inventory lean, when they have to maintain stock to accommodate their new 10 year warranties? That’s a lot of of parts to be in a warehouse or distribution center, let’s assume people do not have issues with their vehicles for 8 years or so, what do they do with all these supplies?Explanation / Answer
Hyundai is the seventh largest auto maker in the world holding almost 10% of the world market share. To stay competitive in the market, auto companies are following the Toyota's lean manufacturing concepts, and Hyundai is one among them. Hyundai had set a new dimension in the quality, productivity and top lean performance and is out doing most of the top auto makers by its lean manufacturing.
To stay ahead in the market requires reduction in the inventory costs, and increase in the production. This is only possible by using the lean manufacturing concepts. Hyundai keep their final inventory lean. It means, it uses Just-in-time and Kaizen techniques in its manufacturing and ensures that its final inventory is kept low.
Company generally maintains the stock of its parts. It keeps the stock of the parts instead of the finished vehicles. Based on the demand of the vehicles, it assembles the parts and sends the vehicles out just-in-time. Stocking and piling of the finished inventory (completely manufactured cars) is a cost and it might turn out to be a dead inventory. But stocking the parts and assembling the cars based on the demand is a smart way of manufacturing.
Hyundai also manufactures its own steel to ensure that the body is light weight. So, it need not stock the body of the car's too. Every thing is Just-in-time. This way, Hyundai auto maker stays lean.
"People do not have issues with the vehicles for 8 years or so, what do they do with all these supplies"?
Hyundai car models are long lasting. So are their car parts with long warranties. The supplies that Hyundai stocks is not for the people who already have Hyundai cars. Those stocks are available at the distribution Centre. The supply stocks in their manufacturing units are used for assembling their different car models. These supplies are for internal consumption and not for the purpose of selling.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.