Factors that Impact Inventory Levels in a Supermarket System Supplying a Manufacturing Line

Abstract: Purpose - The purpose of this thesis is to identify factors that have an impact on supermarket inventory levels that supply a manufacturing line and investigate how the impact of these factors can be controlled. In order to fulfill the purpose it was broken down into two research questions.   What factors have an impact on supermarket inventory levels supplying a manufacturing line? 2.      How can the impact of these factors be controlled? Method - To answer the research questions a literature study and a case study were conducted. The empirical findings from the case study and the literature study were used to find the answer to the first research question. The identified factors in the first research question were then analysed with the theoretical framework in order to answer the second research question. Different techniques have been used in order to collect necessary data including documentation studies, interviews, observations and basic training in the case company’s procurement system (GILM).   Findings - Total safety lead time, firm time and shortage impact were discovered during the case study. These factors were not to found during the literature study because they were specific parameters that are predetermined in the case company’s procurement system. Internal material handling and supermarket order quantity were factors also found during the case study. The identified factors are divided after which tool or method that can be used to gain control over the factor. Four different tools have been identified as solutions to gain control over the internal material handling. The factors that only have one identified tool as a solution are either case specific or not attentive in the theoretical framework as the other tools.   Implications - The identified factors from the literature study are considered as common factors that can be applied for companies that have a supermarket inventory. If manufacturing companies are facing problems with their supermarket inventory levels they can increase control by investigating the tools and methods presented in this thesis. Contributions - The factors that were identified during the case study have contributed with new discoveries in the field of study, since there is limited research done in this subject regarding supermarket systems.   Research limitations - More case studies could have been performed at similar companies, in order to investigate how generalizable the answers to both research questions are.