A critical assessment of inventory management principles and purchasing routines: Managing packaging material in a process industry
Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesisAlternative title
En kritisk granskning av lagerhantering och inköpsrutiner : Hantering av förpackningsmaterial inom en processindustri (Swedish)
Inventory management is today seen as more competitive oriented, process oriented and better integrated into the companies than before. But still do several companies run their inventories according a traditional approach. There is therefore a need for some companies to evaluate their inventory management and adapt the new view. There is also a need to adjust for increased focus on sustainability, previous research calls for strategies and tools that include sustainable parameters without lowering the profitability.
The purpose with this study is to assess inventory management principles and purchasing routines related to the acquisition of packaging material in a process industry. The study aims to develop a framework for decision makers in inventory management. This framework will be the basis for a support tool incorporating a relatively simple and easy-to-use user interface.
This master thesis is performed as a case study research and uses several data collection methods, such as a literature review, observations, and interviews. The findings from the data collection is used to evaluate which impact inventory management has on a company’s profitability, and which basic parameters that could be included in the support tool.
The empirical findings show that Barilla Sweden’s current inventory management match the traditional approach, but also that they strive to become more competitive and process oriented in their management of inventories. There is however some constraints in their working strategy that prevents them from taking the next step. Comparison between Barilla Sweden’s current order size and an economical order quantity (EOQ) and just-in-time (JIT) approach is made. The comparison shows that Barilla Sweden has money to save and warehouse space to release with changed order quantities.
Adapting a new inventory management approach require review of uncertainties, such as delivery accuracy and forecast changes. It is also necessary to evaluate supplier relations and internal working strategies. The effect of these parameters on inventory management can be noticed in the support tool. The tool compares total costs, average stock, tied capital, and environmental and social consequences between the EOQ model and JIT. The support tool visualizes drawbacks and benefits with different order sizes and has an easy-to-use interface.
Place, publisher, year, edition, pages
2015. , 115 p.
Economic order quantity, Inventory Management, Just in time purchasing, Sustainable inventory management.
Engineering and Technology
IdentifiersURN: urn:nbn:se:kau:diva-36653OAI: oai:DiVA.org:kau-36653DiVA: diva2:824814
Engineering: Industrial Engineering and Management (300 ECTS credits)
Nordin, Dande Vin, Leo