Manufacturing Inventories


Manufacturing inventories depend on how much value has been incorporated by the firm:

  1. Raw materials
  2. Components/Subassemblies/Unfinished items
  3. Work-in-process
  4. End items/Finished goods

Raw materials are any inventories by a company which the company has not yet processed in any way. This would include such obvious raw materials as iron ore, sand or glass. However, by definition, it could include computer chips or other expensive items which have not yet been processed.

Components/Subassemblies/Unfinished items have been processed to some extent by the company, but are not yet finished. They may leave production area and be stored off the line, but will still not revert to being called raw material. They already have value added.

Work in process is similar to components, et al. it is actually a mixture of raw materials and components that are currently a part of the production process. So some raw materials may be part of work-in-process, and some components may not be.

Finished goods are simply goods which are finished and ready for sale. They are almost never left in the work area, but are moved out into final storage or packaging.

There is often some ambiguity about classification, since a company may sell some unpainted furniture but paint some for final sale. Is a given unpainted piece to be considered finished goods or not? Perhaps we need a new term for such goods.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Mobilizing Support for Change Managers


Despite using the principles of influence, social networks and negotiation, change efforts in an organization can falter for different reasons. There has been a great deal of interest in finding out why people are so unwilling to stop out of their comfort zones and accept change. Some of the major  impediments to change are:

  • People believing that the change effort is yet another fad: Over a period, many employees have come to perceive different change programs as fads because they associate these with previously failed initiatives. As a result, they do not pay attention to the merits of the arguments. Change induces dissonance, and people often reduce the resulting stress by reverting to previously held assumptions, beliefs, and behaviors.
  • People who believe that change agents are not credible: Employees tend to view the strength of the change idea by associating it with the person who advocates that position. In other words, if the change manager is credible, the idea is seen as convincing. On the other hand, when the manager is perceived as untrustworthy, people tend to reject the change ideas.
  • People who have difficulty unlearning old ideas and approaches: Most often, people do not know how to stop what they have already been doing. When they are faced with uncertainty and ambiguity, they feel a sense of loss of control and this leads them to persist with their existing methods and approaches.
  • People who have difficulty learning new patterns of behavior: When people face unfamiliar situations, they often fail to comprehend the complexities of the situation. They may also feel apprehensive that if they try out new behaviors and fail, they would attract criticism. Faced with a fear of failure and believing that change would make little difference, they may refuse to invest in learning new methods and approaches.
  • People who feel that change threatens their identity: When faced with crises or threats, people tend to uphold their pride rather than appreciating the learning challenge that it offers. There is great comfort in existing belief structures, as these constitute one’s personal identity. Any attempt to change behavior may be seen as a challenge to that identity. As a result, it generates resistance to change.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight