Journal of Applied Economic Research
ISSN 2712-7435
THE INFLUENCE OF STRUCTURAL CHANGE IN METALLURGICAL HOLDING ON THE INVENTORY MANAGEMENT SYSTEM
Belik I.S., Latfullin R.R.
Abstract
The article describes a range of problems related to the influence of structural changes in holding companies of ferrous metallurgy on the inventory management system of subsidiary enterprises of the companies and the relationship of inventory management with Enterprise Resource Planning systems (ERP). The scientific hypothesis which was the basis of this article was the assumption of inevitable changes in inventory management at the enterprises of ferrous metallurgy caused by the formation of large integrated structures in the industry – i.e., "holding companies". The article indicates the mandatory elements of the holding structure, provides the definition of a holding company, analyzes the processes of the segregating subsidiary enterprises of metallurgical holding companies into a new level of management, and defines the features that influenced the changes in the production management system and the inventory management system in holding companies and their subsidiaries. The article substantiates a conclusion that the discussed features indicate restriction of targeted top-down management in holding companies, its modernization leads to the emergence of a new level of management and the overhaul of the management structure. The formation of a new level of management drives the administrative structure and the planning and control units to the launch of a self-organizing mechanism, which, as the authors believe, shows in the inclusion hierarchy criteria and differentiation of the classification of material resources and the use of a combination of different methods for determining the need for stocks when it comes to inventory management. The article also discusses the role of ERP systems that are formed to determine the need for factory stocks and the possibility of exercising control over their cost, which is included in the functions of the control system. Additionally, the article describes an algorithm of implementation of the methods of rationing factory stocks into ERP operating in industrial enterprises and problems of adaptation of the methods to budgeting systems of the enterprise. The article analyzes changes in the system of planning and control in the inventory management system and specifies the scheme of operational control over the actual state of stocks. The final part of the article makes recommendations for the use of the results of the research at metallurgical holding companies.
Keywords
Key words: inventory management, factory stocks, a metallurgical holding, material supply, working capital, budgeting.
About Authors
DOI: http://dx.doi.org/10.15826/vestnik.2015.14.6.048
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