How to Reduce Overstock Inventory: A Case Study

Industrial and production companies are starting to realize that greater and more varied supply chain activities, as well as upgrades and improvements at the internal and external levels, are crucial if they want to compete. Overstock or stockout situations in the company's raw material inventory operations are frequent issues in supply chain activities. The inventory audit process in 2021 at PT. ABC's SGRD warehouse yielded a total stock variance of 1449 bins. The purpose of this study will look for the main cause using the Root Causes Analysis method for cases that experience overstock and stockout in the SGRD warehouse of PT. ABC with a variance value of IDR. 75,000,000. In conclusion, the root causes of among others: Material given to customer without GI / reservation, Improper TO confirmation, and Unidentified / Misidentified Material are discovered by the Root Cause Analysis approach. Additionally, a number of suggested actions are provided below for additional supporters and various sections of the process to improve: receiving, issuing, and transfer