Inventory systems redesign for D.M.C. SM Megamall store of Focus Global, Incorporated, Mandaluyong City

Date

5-2010

Degree

Bachelor of Science in Industrial Engineering

College

College of Engineering and Agro-Industrial Technology (CEAT)

Adviser/Committee Chair

Mikel Angelo B. Yap

Committee Member

Diana Marie R. De Silva, Marc Immanuel G. Isip

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Abstract

Focus Global, Inc. (FGI) is a Filipino Company established in 1991. With main office located at pioneer and Corner Reliance Streets, Mandaluyong City, Philippines, its daily operations involve warehousing, distribution, retailing, and marketing. Amongst its retail stores, D.M.C. SM Megamall was chosen as the focus of the study. D.M.C. SM Megamall store handles more than 800 different products and maintains almost 70,000 pieces of retail items. The problem with the store was its poorly designed inventory system, which resulted to a PhP1,1234,127.00 annual worth of unrecovered missing items, a drawn out physical inventory count amounting to PhP35,629.63 annually, and 79,928 overage products kept in the store, which required PhP231,972.01 worth of product handling costs. To analyze and provide solutions to the problem, data were gathered through observations, interviews existing company records Root causes, grouped according to the store's major processes, were identified using Ishikawa diagram. Included in the root causes were the loopholes in the current process. Overall, twenty root causes and loopholes were identified, for which eight solutions were generated.U&sing personal researchers, comprehensive consultation, and again, Industrial Engineering (IE) tools, eight solutions were generated. Evaluation of the solution resulted to an entire redesign of the store's inventory system. The overhaul included: Responsibility and control improvement of the store personnel, Systematic arrangement of items in the cabinet, Setting up the store for the count, Implementation of SAP for the inventory systems, Inspection of box contents, Strict compliance to the six-month rule for coverage products, Setting the start of count at 10 AM and use of barcode boards.Evaluation of the solutions resulted to an entire redesign of the store's inventory system. The overhaul included: responsibility and control improvement of the store personnel; systematic arrangement of items in the cabinet; setting up the store for the count; implementation of SAP (Systems, Applications and Products) for the inventory systems; inspection of box contents; strict compliance to the six-month rule for overage products; setting the start of count at 10a.m., everyday, and use of barcode boards. Implementation of the solutions eliminates cost for lost items, reduces physical inventory count to 6.5 man-hours from 32.41 man-hours, and improves control for overage products turnover. Considering ten years of implementation and an average rater of return value of 12%, the net present savings would be PhP2,826,843.00.

Language

English

LC Subject

System design--Auditing

Location

UPLB College of Engineering and Agro-Industrial Technology (CEAT)

Document Type

Thesis

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