Improvement proposals for uncontrolled inventory : The advantages with connecting uncontrolled material to the enterprise resource planning system through reordering points

University essay from Jönköping University/JTH, Logistik och verksamhetsledning; Jönköping University/JTH, Logistik och verksamhetsledning

Abstract: Summary Objective - The objective of this research study is to develop improvement proposals for an ordering handling system of uncontrolled packaging materials. By analysing data from related products in combination with observations and interviews the following research questions were answered to reach the purpose of the study: How can reordering points and inventory handling of uncontrolled packaging materials be structured? What would be the advantage of implement and plan uncontrolled packaging materials in an ERP system? Method - By studying a business phenomenon without firstly determine a theoretical background, the approach of this report has been through inductive research. By first observing the problem and connecting it to related theories the problem could be analysed and processed according to a theoretical approach. Results - The findings of the study show that data of uncontrolled materials can be derived through the connection of relevant products by using a breakdown structure. By this approach data and forecasts of related products could be summarized and used as a calculation basis for a reordering point system. The advantages of implementing reordering points of uncontrolled materials into an ERP system resulted in a reduction of non-value adding activities, reduction of maximal inventory, reduced tied-up capital, and to a controlled ordering handling. Implications - To further the study area of uncontrolled materials the researchers suggest that studies within other areas than packaging material is examined with a similar approach. Parts of the study, such as the combined demand and productmapping, could be applied in projects with more complex structures to explore the limitations of the method. This would increase the knowledge base on how to structure and control materials that do not follow any system. Furthermore, the scope of the report has been to focus on high volume packaging materials and therefore it would be interesting to see the approach applied to low volume products or materials. Restrictions - As data of this study is created by connection of related products it entails that similar circumstances exist if the project is to be replicated. Furthermore, the study is solely focused on the inventory department which could be a delimitation. Charts and data illustrations – In the report charts and data are manipulated according to the confidentiality agreement with the case company. The provided examples illustrate the relation between different factors although does not reveal any true data derived from the case company.

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