Implementation of inventory management in a footwear industry

Abstract

Purpose:The objective of this research was to implement new inventory management in a footwear company through the analysis of indicators obtained from inventory data collection. Design/methodology/approach:The ABC analysis methods, demand forecasting, safety stock, reorder point, and economic order quantity were applied. The items in inventory were classified by order of economic importance through ABC analysis, and the proposed indicators were analyzed to determine the moment the inventory replenishment should be carried out as well as the purchase lot size for each item. The research also investigated the behavior of the demand and pointed out the demand forecasting method that came closest to reality. Findings:The study presents a method of implementing inventory management based on indicators derived from the application of ABC curve methods, demand forecasting, safety stock, re-fulfillment point, and economic purchased lot. It also indicates how the ABC classification of stocks can check the most representative materials in stock. The study also highlights that the rejection of modifications can be surpassed by obtaining favorable results. Research limitations/implications:The inventory management applied in this work is based on indicators that resulted in two primary data that defined the size of the purchased lot to be ordered and the amount of material needed. Practical implications: The methods of ABC analysis, demand forecasting, safety stock, reorder point, and economic order quantity were applied. The items in inventory were classified by order of economic importance through ABC analysis, and the proposed indicators were analyzed to determine the moment the inventory replenishment should be carried out as well as the purchase lot size for each item. The research also explored the behavior of the demand and pointed out the demand forecasting method that came closest to reality. Originality/value: In this study, a method applied is presented, highlighting the methodological application’s importance for inventory management implementation. The study contributes to the encouragement and adoption of methodologies to improve analysis and inventory management in companies