Background: Lahore region is one of the nine regions through which Dalda Foods operate with in the whole country. Management of finished goods inventory at regional level consist of downstream relation with agents and upstream relation with factory warehouse. At regional level they manage the finished goods inventory to increase accuracy in the flow of finished goods.
• How does Dalda manage the flow of finished goods inventory at regional level (Lahore region)?
• What are the causes behind the inaccuracy in the flow of finished goods inventory at regional level?
• How can ABC analysis, safety stock and forecasting model be used to improve the accuracy in the flow of finished goods inventory at regional level?
Purpose: The purpose of this study is to identify that how Dalda is managing the flow of finished goods inventory as well as the causes behind the inaccuracy in the flow of finished goods inventory at regional level. How these causes can be removed through ABC analysis, safety stock and forecasting technique?
Methodology: This is an exploratory case study. Deductive approach has been used in this study. Both qualitative and quantitative research methods have been used. Data collection methods like primary and secondary has also been used in this thesis to collect data.
Conclusion: Currently no any technique of inventory management is being followed properly at regional level for accuracy. There are some causes behind the inaccurate flow of finished goods inventory like not classifying SKUs properly, don’t consideration of safety stock and unreliable method of forecasting. These causes can be removed by properly using ABC analysis, safety stock and forecasting techniques.
Suggestions on future research: A Distribution Requirement Planning (DRP) system can be implemented by using our study as a base. Moreover a system of collaborative, planning, forecasting and replenishment (CPFR) can also be used for systematic replenishment of inventory.
Source: Linnaeus University
Author: Abid, Umair | Ahmed, Bilal | Semwoul, Shamaoun