Inventory Management of Raw Materials for Condominium Furniture Production

Abstract

Currently, the furniture production department of case study company is responsible for managing inventory of assembly fittings. The problem lies in the open-storage nature of the production line's inventory, lacking defined procedures and a designated supervisor. Additionally, various inventory items were not categorized or had specified storage quantities. This research aims to investigate and propose solutions to prevent shortages of critical inventory items and reduce inventory management costs. The study was initiated by collecting data on a total of 92 inventory items. These items were then categorized using the 5S methodology by experts. Two criteria were applied for the sorting process: usable and unusable items. As a result, the number of usable items was reduced to 51. Following the categorization, 21 items that were replaced by newer models remained. Subsequently, these 21 items were classified using both ABC Analysis based on annual demand and VED Analysis based on their importance. The results were then analyzed to determine the relationship between the demand and the importance of inventory items, leading to the establishment of control policies. The findings revealed that a maximum-minimum (Max-Min) reorder policy could be implemented for VB type items, (Items of high importance and moderate demand) and reduce the management cost of inventory by 25%. Which effectively prevents inventory shortages and reduces inventory management costs.