INCREASING EFFICIENCY ON INVENTORY MANAGEMENT FOR MECHANICAL EQUIPMENT: CASE STUDY OF MABLE HARDWARE LTD.,PART. Research Aticle

Abstract

The study on the business model of Mable hardware Ltd.,Part., a company manufacturing, merchandising and installing mechanical equipment in a mining industry, has found that the mechanical equipment business is highly competitive due to rapid advancement of new technologies, resulting in constant product updates and affecting stock management. The research on its operation found that the company lacks efficiency in inventory management in term of picking time. The problem of order picking time was caused by unorganized stocks, resulting in difficulties in products locating and opportunities losses in sales. Thus, the improvement of the management system was investigated through the FSN Analysis by categorizing products upon the product access rate, redesigning inventory layout, and organizing product numbering system. Regarding the issue on obsolete inventory caused by lack of quantity tracking for inventory, it was necessary to carry out inventory cycle count and launch a promotional campaign for slow-moving products. As to the damage goods from unorganized stock and stacking, the situation was solved by redesigning the inventory layout. After the improvements, based on the categorization by the FSN analysis, order picking time has improved from 527.4 seconds to 255 seconds, a decrease of 272.4 seconds or 52%. Product obsolescence has decreased 100% from inventory cycle count process and the damages from product stacking has decreased 100% from redesigning the inventory layout.