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InventoryInventory is the physical Stock of goods
maintained in an organization for its smooth
running.
Also Stock of Finished Goods
Also Inventory is unsold goods purchased or
manufactured
Nature of Inventories Raw materials
Those Inputs converted into finished products though the manufacturing process
Work in progress
Semi manufactured products Finished goods
Those completely manufactured products.
Functions of inventory
To meet anticipated customer demand
To smooth production requirements
To decouple operation
To protect against stock-outs
Functions of inventory
To take advantage of order cycle
To hedge against price increase
To permit operations
Inventory Management
It refers to the process of managing the stocks of
finished products, semi-finished products and raw
materials by a firm.
Inventory management, if done properly, can bring
down costs and increase the revenue of a firm.
An activity of Planning an inventory control policy.
Introduction of Nestle
Nestle is a multinational company and is known as a
world’s leading business today for food
Henri Nestle was the founder of the corporation,
was established in 1866.
Nestle has home office in Vevay, a city of
Switzerland.
Introduction of Nestle
It has used around 250,000 people and has modern offices or
operations on the planet.
Nestle is the real world's company driving nourishment, well
being and quality products.
Nestlé in Pakistan is operating since 1988 under a joint
venture with Milk Pak ltd and took over management in 1992
Vision of Nestle The Nestlé global vision is to be the leading health,
wellness, and Nutrition Company in the world.
Lead a dynamic motivated and professional workforce.
Deliver shareholder value through profitable long-term
growth
Mission Statement of Nestle
“Nestle is dedicated to providing the best foods to
people throughout their day, throughout their lives,
throughout the world. With our unique experience
of anticipating consumers’ needs and creating
solutions, Nestlé contributes to your well-being
and enhances your quality of life.”
Nestle Core Values
Direct any dynamic inspired and skilled staff
Meet the healthy wants regarding consumers of
most ages
Provide shareholder increase in wealth by way
of worthwhile long-term development
Nestle Core Values Nestle have got worthwhile and also diversified excellent foods
and also beverage merchandise collection.
Nestle brand names are the preferred selection in the
consumers
Our sales and marketing communications to the client are
usually related, cutting-edge, and also adhere to the very best
criteria regarding accountable conversation.
Introduction of Qureshi Traders
Qureshi distributors and traders are the sole distributor of Nestle
Foods in Islamabad Pakistan. They are based in I-9 Sector Islamabad.
Qureshi Trades 3rd Party Logistics
Qureshi Traders are the elite merchants of Nestle working on 3PL
model.
3pl efforts for high returns.
Hierarchy of Qureshi Traders
CEO
Manager
Drinks Division
Sales Management
Manager Food Division
Sales Management
Manager Food Service Division
Sales Management
General Manager Finance
General Manager Logistics
General Manager
Operations
What are the types of items the company stocks?
Qureshi traders are the sole distributors of Nestle food
and beverages products in Islamabad.
They distribute lots of Nestle products in the food and
beverage sector
Qureshi Traders do not distribute the filtered water
because Nestle have separate distributors for Water
What are the types of items the company stocks?
Various Product CategoriesAmbient DairyChilled DairyBeveragesCulinary & FoodBaby FoodBreakfast CerealsCoffee
When to Reorder a certain item?
Qureshi traders used the software FORAN inventory to
check the inventory level.
FORAN software has the ability to check and maintain
the minimum inventory level
The software have indicators which blinks when the
inventory is low
When to Reorder a certain item?
In this way, the company have to reorder keeping that
thing in mind that the delivery time of the order is 2-3
days.
to ignore this delivery time the company have to
maintain the level of inventory in such a way that it
fulfill the demand of those 2-3 days
How much to Reorder at a certain time
Qureshi Traders have their own sales force which takes orders from
the market and on the basis of those orders Qureshi Traders order
that amount of stocks
Basically the software that Qureshi Traders uses are not that much
efficient for calculating the EOQ and the Qureshi Traders order the
products on the basis of their Experience.
and they order 10% extra as a safety cushion so that the lead time
do not affect them
Automated inventory control system
Qureshi Traders uses the customized inventory software known as
“FORAN Inventory”.
As in the years 2006-2009 Qureshi Traders faced lots of difficulty in the
management of the products
All the data about the inventory were maintained by using MS Excel
The wastage and the theft was high during that time period,
Due to the high miss management and theft reasons Qureshi traders
contacted Software Base Solutions (SBS) in Islamabad.
Automated inventory control system
The brief features of FORAN Inventory management
includes
Add details for product categories.
Add details for items for each category
Details for clients, suppliers and companies.
Details for sales & purchase items
Details for sales return
Advantages of FORAN Inventory
1. Speed and Efficiency
2. Document Generation:
3. Timely Data:
4. Time Saving
Question # 5WHAT ARE THE WASTAGES THAT ARE
OCCURRING IN THE COMPANY DUE TO AN INEFFICIENT INVENTORY MANAGEMENT SYSTEM (GIVE EXAMPLES OF ACTUAL
INCIDENTS)?
Wastages Wastage should be allowed up to a certain level known as normal wastage.
To avoid any abnormal wastage, strict control over the inventory should be
exercised.
Qureshi Traders uses the workforce to unload the products from the trucks
Due to this the packaging of the products get damaged and it becomes the
waste for the organization.
Another waste is the movement waste as the picker have to move across the
cartons, it takes lot of time and the picker have to move many time around
the one place
Question # 6WHAT ARE THE PROBLEMS THE COMPANY IS FACING WITH THE
EXISTING INVENTORY MANAGEMENT SYSTEM (GIVE EXAMPLES OF
ACTUAL INCIDENTS)?
Problems in the Existing Inventory System
Problems in the Warehouse
Design of the Warehouse
Honeycombing
Truck Capacity
Route Map
Problems in the Existing Inventory System
In terms of Transportation, Trucks are less in number and the inventory is large to distribute so it
increases the cost
Drivers are not properly trained and most of the time they follow different route than which is allocated to them.
Proper route planning is required for Qureshi Traders in order to effectively distribute the goods and to decrease the cost.
Proper Parking is required for the trucks as there is no allocated space so the movement from the warehouse to the truck increases the motion and time wastages
Recommendations
To avoid the honeycombing they should focus on
their warehouse storage layout.
There should be tracking system in the warehouse
Qureshi Traders is to the use of deep lane storage
shape shelves
Recommendations Qureshi Traders should focus on improving the inventory
management software
Department layout plays a vital role in efficiency of the warehouse
managing and distribution and storage management
Qureshi Traders must use its financial clout to help the transporters
assemble capacity by simply acquiring fresh trucks that could
operate with highly effective levels.