Improving the performance of planning and controlling raw material inventory in food industry

Abstract

This paper discusses the inefficient and inaccurate raw material supply at a food company which results in a backlog. This means the overstock occurs so that the improvement of inventory control needs to be done. ABC classification is firstly utilized as input for Material Requirements Planning (MRP). This paper focuses on four products which are classified into A class. Then, this paper discusses the Triple Exponential Smoothing as the forecasting method. Aggregate planning is also conducted for better production planning. The results of aggregate planning provide solutions to increase the workforce to balance production capacity by the number of demands. Squared Coefficient of Variation (SCV) calculations indicates the demand follows a static pattern. Therefore, the appropriate lot sizing method is the Economic Order Quantity (EOQ) to carry out the production needs. Finally, this paper uses capacity planning using Rough-Cut Capacity Planning (RCCP) and Capacity Requirement Planning (CRP) methods. As a result, the capacity meets the Master Production Schedule (MPS) as well as MRP and they are feasible to be implemented.