Student Lau Tzen Yik PSCM 2020 Advisor Dr

Student: Lau, Tzen Yik PSCM 2020 Advisor: Dr. David Gonsalvez Sponsor: Construct. Co. (Malaysia) Motivation / Background Inventory optimization after retail network revamp January 2020 Poster Session Future network Initial Results Categorization of fast and slow moving SKU based on sales history at each location: In aggregate 38% slow moving SKUs contributing to 14% total inventory value Current supply chain ➤ Management decided to further close 3 out of 4 retail stores • Low walk-in customer volume • High investment needed to upgrade retail shops • Changing focus into e-commerce ➤ Setup of 2 nd distribution center (DC) in East Malaysia ➤ SKU consolidation to central warehouse (CW) in peninsular Key Question / Hypothesis ➤ What is the optimized SKU portfolio and the inventory level at central warehouse and new DCs? ➤ With the future supply network, how to improve service level and optimize the stock availability to customers? Relevant Literature ➤ H. Ravinder & Ram. B. Misra, (2014). “ABC Analysis for Inventory Management: Bridging the Gap between Research and Classroom” in American Journal of Business Education -3 rd Quarter 2014: 257 -264. ➤ Holzapfel, A. , Kuhn, H. , & Sternbeck, M. G. (2016). “Product allocation to different types of distribution center in retail logistics. ” European Journal of Operational Research, 948966. BACK TO KIOSK MENU Central Warehouse (CW) ØCentral inventory storage ØDelivery to whole Malaysia Delivery lead time within peninsular: 48 h Retail Store Ø walk-in customer Ø Online “click and collect” at store Ø New products display Ø Demo room to tryout product DC 1 & 2 Ø Delivery to customers in Sarawak / Sabah region Ø Delivery lead time within region : < 48 h Methodology Expected Contribution Research Problem • Problems and changes within company • Discussion and narrowing down the topic Data Collection • Historical sales data • Interviews • Product • Shipping lead time • Product margins • Inventory levels Data Analysis • Segmentati on • SKU demands • Safety stock level • Demand variability • Delivery charges Results • High margin / low margin SKUs • Delivery lead time and cost for Dangerous Goods (DG) / non-DG SKUs Discussion • Alignment on new product launches • Regular checking of inventory • Overall bottom line impact ü Optimized inventory through SKU segmentation and consolidation ü Improved working capital for the company ( >10% inventory value) ü Better stock availability to customers, right product at the right locations Lau, Tzen Yik