Inventory managemen in commercial refrigeration manufacturing

Abstract

This thesis focuses on developing the inventory management system for a commercial refrigeration manufacturing with assembly-to-order environment. The propose system encompass establishing appropriate inventory policies for all items, improving work flow and information flow, and establishing an inventory monitoring tool. The major problem of a case study company is on inappropriate inventory level. The analysis focuses on internal inventory management practices which are non-uniform and manually intensive. The company under study has no certain policy on inventory management which resulted in high inventory level, low customer service, and high operational costs. In addition, the lacking information shared between material planning and purchasing sections resulted in double-buffer stock, unrealistic supplier lead-time, too much replenishment quantity, and non-integrated replenishment quantity. The research starting from analyzing the existing inventory management system, indentifying the causes of the problem. In the proposed system, a wide variety of materials are classified into group according to source of supply and purchasing quantity constraint. Then, appropriate inventory policies for each group are selected based on storage area constraint, purchasing constraint, and material reviewing frequency. Materials are classified into three groups and managed with (R,S), (S,s), and (S,Q) policies. Finally, the inventory level monitoring tool is established integrate new information with existing information and to remind replenishment time for purpose of order fulfillment. This monitoring tool serves as an information sharing between material planning and purchasing sections. This tool is developed through using Microsoft Access version 2000 as the database management system, and Microsoft Excel version 2002 as reporting tool. The comparison between the existing system and proposed system shows the significantly improve on customer service level, part availability once production need, and inventory level.