IMPROVING INVENTORY MANAGEMENT POLICY CASE STUDY: 999 STATIONERY

• Main Author: Widi Alifah, Julia
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/38997
• Institution: Institut Teknologi Bandung

The growth of stationery and hobby sector predicted will contribute to market volume as much as IDR 22.6 billion in 2022. The promising prospect in stationery industry encourages people to compete in this market, so there are plenty stationery store popped up. One of them is 999 Stationery. 999 Stationery is one of stationery located in Purbalingga, Central Java. There are approximately 10000 product provide in the store. In order to manage almost 10000 product, 999 Stationery face some difficulties since they did not have exact system to manage their inventory. Because of this condition 999 Stationery face high cost problem due to shortage and overstock. This study is conducted by using the historical data of 999 Stationery demand from November 2018 – April 2019. Based on fishbone analysis the root cause that occurs in company divided into 3 aspect, method, people and facilities. This study only focused to solve the problem in method area which include 999 Stationery do not have exact system to determine ROP, safety stock and order amount, also they rarely consider historical data while making decision about inventory management policy. This study use MRP simulation to help determine the cost that include holding cost, ordering cost and shortage cost. For ROP and safety stock will be used probabilistic model. As for order amount will used EOQ formula. At the end there will be cost comparison between the existing inventory policy and the proposed inventory policy. From the comparison we can determine which condition that generate more benefit or have the lowest total cost for 999 Stationery. Based on the research, holding cost in current inventory management policy take 80%-98% from the total cost, it means there are a lot inventory in 999 Stationery warehouse. In proposed strategy the percentage of holding cost is almost the same with the current inventory policy. But since the total cost is decreasing in proposed strategy the total holding cost also decreasing, but it makes the shortage cost is increasing a little for 3 types of product which are notebook SIDU 38, Standard AE 7, and Pencil Staedtler 2B. Even though there is an increasing of shortage cost but the shortage happen can still be tolerated because it is not above 5% of total demand. The result of cost comparison for 5 selected product are the decreasing of total cost for Notebook SIDU 38 for about IDR 790,500.00, Pen Standard AE 7 for about IDR 1,173,600.00, pencil staedtler 2B IDR 941,160.00 ,glue hanakol IDR 430,800.00 and IDR 2,363,000.00 for Snowman Board Marker. The analysis shows that the proposed strategy can be implement as a proposed solution for 999 Stationery because the proposed strategy give lower cost than the current strategy used by 999 Stationery. But, since 999 Stationery has almost 10000 products it can be quite difficult to use a simple excel table, because the manager should update the data manually. So we recommended 999 Stationery to make a new system that can help them calculate reorder point, safety stock and order amount based on the MRP simulation and also the cost analysis.