BS in Industrial Technology
With the current trend toward globalization, every company is facing pressure to increase efficiency and reduce costs. A well known cost offender is high levels of inventory, which represents asset value that is not easily liquidated. This is especially true when a company’s business model is based primarily on moving high volumes of product between upstream suppliers and downstream customers. Companies using this business model are overly exposed to the costliness of holding excess inventory.
This senior project investigates the cause of high packaging material inventory within a global agricultural importation and distribution business, Gourmet Trading Company. By conducting a series of interviews and inventory analyses, the problem was determined to be a combination of communication issues and lack of a formal forecasting process.
The proposed solution has been developed by the consultants to correct both the issues identified. This solution includes creating an accurate forecast and plans to implement a sales & operations planning system to sustain the forecasting process. The resulting data shows that significant cost reductions can be realized by implementing this solution.