Inventory management development plan for case company

In order for businesses to continuously grow and develop, it is important to optimize their inventory. Well optimized inventories tie less capital and generate more value for the customers. This thesis was made for case company located in Pirkanmaa region. The purpose of this thesis was to create an inventory management development plan for commissioner. The plan was to analyse current product data provided by case company. Literature and online references were used in thesis. The author inspected sales and deviation to calculate suitable safety stocks. The mission was to find suitable models used in inventory management to develop their inventory management. In the beginning of thesis process commissioner starting situation was that they did not have an existing advanced enterprise resource system to define important parameters for their products. This thesis was meant to be utilized for that purpose and to help business grow. Author used quantitative research method to analyse the data provided by case company. Products were analysed by ABC analysis to determine four selected items for further investigation. Sales of these selected items were calculated by demand standard deviation. Safety stocks with different service levels were concluded. Author also suggested reorder points by example. The author also used DMAIC cycle in this thesis. DMAIC is improvement cycle used to improve operations. What needs to be recognised is that demand and supply will change over time. Last step of the DMAIC is control and it stands for continues improvement and that the never-ending cycle starts again. This means that parameters for items needs be updated by commissioner. Monitoring changing situations is most important for class A items defined by ABC analysis. As a result of this work was a development plan to be utilized further. Development plan contains a framework which guides how to analyse demand for items, calculate safety stock and reorder point. This plan helps commissioner to analyse their items and to set suitable parameters in the future