Design of inventory control for the justification and reduction of stock
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Abstract
Since the start of the economic recession, manufacturing companies of railsystems are forced to reduce working capital in order to compete in the market. The internal logistic processes of EdilonSedra are analyzed with the Delft Systems Approach. Several problems are determined related to inventory control and management. The analysis of the processes shows that there is a lack of detailed forecasts and process performance measurements. No service level agreement is implemented for having clear agreements between supplier and customer and no actual data is used for the determination of safety stocks. The control structure is revised to improve the control and management of inventory. Due to this improvement a reduction of 10,5% of the working capital can be attained on the basis of inventory whereby the quantities of raw materials and finished goods stored can be justified.