THEORETICAL BASIS
Concept, role, characteristics of inventory
Inventory refers to the stock of raw materials, components, semi-finished products, and finished goods that are accumulated throughout the production and distribution processes (Ballou, 2004).
Inventory encompasses raw materials, work-in-progress, and finished goods available for sale, making it a crucial asset for companies It significantly contributes to revenue generation and earnings for shareholders, as effective inventory turnover is vital for financial success Classified as a current asset on the balance sheet, inventory plays a key role in a company's operational efficiency and profitability.
Raw materials: are materials that are sold or kept for future production, sent for processing and purchased on the way back.
Work-in-progress refers to products that are permitted for production use but remain incomplete, meaning they have not yet undergone the necessary procedures for warehousing as finished products.
Finished product: is the finished product after the production process.
In business, inventory plays a very important role, specifically as follows:
Avoiding business losses: By keeping inventory, a company can avoid losing business when there is no supply available at a certain time to meet customer demand
Reducing ordering costs is essential for businesses, as these expenses encompass various elements like typing, approval, and mailing associated with individual orders By consolidating purchases into larger orders rather than making several smaller ones, companies can significantly decrease these costs, leading to improved efficiency and savings.
Achieve production efficiency: Storing enough inventory also ensures efficient production In other words, a sufficient supply of inventory will prevent material shortages at certain times that can disrupt production.
Inventory holds a central focus in accounting, finance, and auditing, making it a critical topic among financial experts Its significance stems from various key factors that underscore its importance in financial evaluations and decision-making processes.
Inventory often accounts for the largest proportion of total liquid assets of a business and is very prone to errors or major fraud in management activities;
Businesses select various inventory valuation methods and stocking models tailored to their specific needs Since each method and model yields different outcomes, it is essential for companies to maintain consistency in their valuation methods and reserve models across financial periods and years.
Inventory value directly affects cost of goods sold and therefore has a material effect on net profit for the year;
Evaluating the quality, condition, and value of inventory is often more intricate than assessing other assets As a liquid asset, inventory plays a crucial role in the production and business cycle, making effective inventory management essential for operational success.
Inventory encompasses a wide range of categories, including complex electronic components, unfinished construction works, artwork, metals, and gems, which can be challenging to classify and value The diverse nature of inventory means it is stored in various locations under different conditions and managed by multiple individuals Consequently, effective material control, inventory management, and utilization of these assets present significant complexities in overall asset management, particularly concerning liquid assets.
Inventory management
1.2.1 The concept of inventory management
Effective inventory management is crucial for businesses, as it involves closely monitoring operations and anticipating market price fluctuations to optimize inventory levels This ensures proper storage policies, reduces risks associated with goods, and ultimately helps businesses lower input costs while maintaining a steady supply of finished products Implementing robust warehouse management solutions is essential to address these challenges and enhance competitiveness in the market.
What is the optimal amount of inventory?
Always ensure that men's inventory is in a safe level, not exceeding the minimum and maximum thresholds
Decide when to source more materials
Decide when to increase or decrease production to adjust finished goods inventory
To maintain operational efficiency, it is crucial to ensure that inventory is consistently available on demand Both inventory shortages and excesses can lead to significant costs for an organization A shortage can disrupt the production line, resulting in reduced output or complete halts in production.
As a result, business declines leading to reduced sales, reduced profits, and worse, losses.
Excess inventory can lead to extended production times and delayed distribution of goods, tying up capital that could be better invested elsewhere in the business for a higher return By managing inventory levels effectively, companies can lower implementation costs and ultimately boost profits.
To minimize costs and inventory investment, it is essential to reduce both the overall expenses and the volume of inventory held This goal can be effectively achieved by maintaining an optimal level of inventory within the organization at all times.
Optimizing inventory management offers dual advantages for organizations: it frees up capital that would otherwise be tied up in unused stock, allowing for profitable reinvestment, and it lowers implementation costs while simultaneously boosting profits.
In summary, inventory management, if done properly, can reduce costs and increase profits for the company.
Inventory plays a crucial role in maintaining a steady supply to meet market demand As such, the quantity and type of inventory are significantly influenced by the fluctuations in market needs.
The availability and reliability of suppliers play a crucial role in determining supply times When multiple suppliers can consistently meet business demands in a timely manner, businesses can maintain lower inventory levels Conversely, if supplier reliability is low, higher inventory levels may be necessary to ensure operations run smoothly.
Geographical location and transportation conditions significantly influence the inventory needs of finished products Businesses situated in areas with challenging or hazardous transportation may face limitations in transporting and selling their goods, leading to passive operations However, advancements in the transportation system have improved the movement of goods from production sites to sales points, facilitating smoother logistics and reducing delays This enhancement not only minimizes forwarding obstacles but also shortens transportation times, ultimately boosting the operational efficiency of enterprises.
Characteristics and commercial properties of goods: Each type of goods has different characteristics, commercial properties, different preservation requirements, thus affecting the amount of inventory and the time of inventory.
The scale of a business, its capital capacity, and the conditions of its reserves significantly influence inventory management A larger enterprise with an extensive business network typically has a stronger market presence and sales capability, while smaller businesses may face limitations Additionally, robust capital resources and adequate warehouse space, along with efficient storage equipment, play crucial roles in optimizing inventory levels and ensuring effective storage services.
One of the criteria to evaluate an effective inventory model is based on inventory cost. According to Arnold et al (2008), inventory costs include the following types:
Product cost refers to the total purchase price of an item, encompassing not only the product's base price but also the direct expenses incurred to deliver the product to the warehouse These additional costs include transportation, taxes, and insurance.
Ordering costs encompass all expenses associated with placing an order, such as sourcing goods, managing the order process—including transactions and contract signing—and delivery management fees to the warehouse In contrast, warehousing costs, also known as holding costs, refer to the expenses incurred while managing inventory activities.
Out-of-stock cost: the cost that reflects the economic consequences of running out of stock.
Out of stock in stock will lead to 2 cases:
- First, customers have to wait until the goods are available This can undermine the customer's willingness to do business with the business in the future.
- Second, if there is no stock, the opportunity to sell will be lost Thus, profits are lost due to low sales and customers switching to buying from competitors.
Inventory models
1.3.1 Economic Order Quantity - EOQ model
The Economic Order Quantity (EOQ) method is essential for determining the optimal order quantity for inventory management, allowing businesses to minimize costs while fulfilling sales requirements By applying EOQ, companies can strategically calculate the ideal amount of raw materials and goods to purchase, rather than buying in excess This model is widely regarded as one of the simplest and most effective approaches for inventory optimization today.
D is the inventory demand for each year, you can take the figures from previous years.
S is the cost to pay for the purchase of goods in exchange for each order (shipping, calling, faxing, delivery, inspection, etc.)
H is the cost for storing goods (warehouse rental, personnel, equipment, electricity, etc.)
The Economic Order Quantity (EOQ) model effectively minimizes ordering and warehousing costs; however, its accuracy is contingent upon several assumptions, including stable demand and lead times, single shipment orders, no discounts, and consideration of only two inventory costs: storage and holding These stringent conditions can lead to unrealistic scenarios and discrepancies in real-world applications.
1.3.2 Production Order Quantity – POQ model
The POQ production order quantity model is an inventory model that is used when stock is continuously arriving or when products are being manufactured and used or sold.
The POQ model, known as the order-by-production model, is ideal for managing production and business activities related to order fulfillment This approach is utilized when goods are delivered continuously, allowing for a gradual accumulation until the total order quantity is reached.
This model is relevant for businesses that both produce and sell their products or manufacture their own materials In such situations, it is essential to monitor the daily production levels of the manufacturer and the supply levels from the supplier.
This model maintains the core assumptions of the Economic Order Quantity (EOQ) model but introduces a key difference: goods are received in multiple shipments To prevent stockouts, the daily demand must be less than the supply available.
1.3.3 Just in time – JIT model
Just in time is a model born in the 1930s pioneered by the big-name Toyota Japan and brought many effects.
Just-in-Time (JIT) is an inventory management model that ensures a close relationship between sourcing, production, transportation, and management processes This approach focuses on producing only what can be sold, coordinating production steps to deliver products promptly and efficiently, thereby minimizing lead times.
To successfully implement the Just-In-Time (JIT) model, businesses must adhere to stringent management, organizational discipline, and inter-unit coordination requirements, making it unsuitable for all enterprises JIT is recognized as the optimal inventory model for industries dealing with perishable goods, such as fresh food and short-shelf-life products, while long-shelf-life items are better suited to Economic Order Quantity (EOQ) or Production Order Quantity (POQ) models.
INVENTORY MANAGEMENT ACTIVITIES AT KIDO GROUP
Introduction about KIDO Group
For nearly 28 years, KIDO Group has been dedicated to enhancing the lives of Vietnamese families by expanding its range of delicious products, all crafted with essential flavors.
Company name: KIDO Joint Stock Company
Abbreviation name: KIDO Group Corporation
Head office: 138 – 142, Hai Ba Trung, Da Kao
Ward, District 1, Ho Chi Minh city
Email: customerservice_kido@kdc.vn
Website name: www.kdc.vn
Create life’s flavors through wholesome, healthy, and nutritious products and be the most recognized company in Vietnam and South East Asia by all stakeholders.
We focus on creating affordable food, snacks, and beverages that cater to the daily needs of consumers Our innovative products are designed to be market leaders, offering health benefits, satisfaction, and convenient availability for our customers.
We strive to generate sustainable value for our supply chain partners by developing innovative food products that meet consumer demand trends and surpass expectations Our goal is to ensure fair returns for all stakeholders while enhancing productivity and quality processes, ultimately fostering sustainable development.
At KIDO, we prioritize the growth and development of our employees, equipping them with the skills needed to excel in their careers while fulfilling their personal aspirations By fostering a dynamic, creative, and innovative environment, we cultivate a KIDO family that empowers individuals to reach their ambitions Our corporate culture emphasizes teamwork and mutual enrichment, making KIDO the ideal place for professional advancement.
We are committed to enhancing the communities we serve through sponsorship initiatives and focused development activities, striving to be a leader in advancing Vietnamese society Our influence extends beyond commercial interests, as we actively embrace social responsibility.
Investors aim to strategically allocate capital to enhance long-term shareholder value while effectively managing risk, ensuring that investments in our business align with and fulfill shareholder objectives.
Figure 3 1 Organizational structure of KIDO Group
Figure 3 2 Product catalog of KIDO Food
Founded in 1993, KIDO Corporation has emerged as a leading Food & Flavor company in Vietnam, maintaining its status as the market leader in confectionery Over its 28-year history, KIDO Group has excelled in a diverse range of products, including confectionery, cookies, and ice cream, all under the well-recognized KIDO brand.
Established in 2015, KIDO Group has focused on expanding its presence in the essential food sector By enhancing its existing platforms, the company has solidified its leadership in the frozen industry, particularly in ice cream and dairy products, while also diversifying its offerings to include cooking oil, instant noodles, seasoning seeds, sauces, coffee, and convenient packaged foods This strategic expansion aims to support Vietnamese family kitchens and cater to consumer needs throughout the day Currently, KIDO holds a dominant position in the ice cream market with a 43.5% market share, as reported by Euromonitor, and maintains over 30% market share in cooking oil, according to internal data.
2.1.3 Performance of the company in the past few years
Revenue/profit growth in the period 2016-2020
Net Revenues Profit after tax
Un it: b ill io n VN D
In 2019, KDC reaffirmed its commitment to becoming the leading food group in Vietnam, with plans to further expand and develop the organization through a multi-industry, multi-channel, and multi-business model approach.
Figure 2 1 Revenue/profit growth in period 2016-2020
Source: Financial statements of KIDO
In 2019, our business saw significant growth in profitability, driven by enhanced operational efficiency, despite a minor decline in revenue due to challenging macroeconomic conditions KIDO reported impressive financial results, with profit before tax rising by 60.5% to 283 billion VND, up from 177 billion VND in 2018, and profit after tax increasing by 40.4%.
148 billion VND in 2018 to 207 billion VND in 2019 Sales of ice cream, yoghurt and frozen foods increased by 10% and sales of edible oils decreased by 8%.
In 2020, the Vietnamese economy demonstrated remarkable resilience amidst the challenges posed by the Covid-19 pandemic KIDO Group, a key player in the food industry, prioritized the health and safety of its workers to maintain operations and ensure a steady supply of goods to consumers during this critical period.
Gross Profits of KIDO period 2016-2020
Un it: b ill io n VN D
KIDO Group excels in crafting seasonal business strategies and offers a diverse product range tailored to local markets, effectively addressing customer needs and enhancing competitive strength Notably, their Tet gift sets for Oil & Snacking, along with collaborative promotional products with other food industry partners, have garnered significant support from customers and consumers alike.
Figure 2 2 Gross profits of KIDO period 2016-2020
Source: Financial statements of KIDO
In 2020, KIDO Group achieved a net revenue of VND 8,324 billion, exceeding its annual target by 101.1% The company's profit before tax reached VND 416 billion, surpassing the plan by 126.1% and reflecting a significant increase of 46.9% compared to 2019 Additionally, the profit after tax for the year was VND 330.2 billion, marking a remarkable growth of 59.3% from the previous year.
Current status of inventory management at KIDO Group
2.2.1 Analysis of working capital assets
Amount of money (Billion VND)
Amount of money (Billion VND)
Table 2 1 Table of working capital assets 2019 and 2020
Source: Financial statements of KIDO
From the above table, we can see that the company's current assets in 2020 increased compared to 2019 Receivables decreased by 379 billion VND compared to
In 2019, the company experienced a decrease in other current assets by 8 billion VND, while cash surged significantly from 525 billion VND to 1,102 billion VND within a year Notably, the inventory for 2020 rose to 304 billion VND, marking an increase compared to the same period in 2019.
2.2.2 Analysis of inventory turnover rate
Effective inventory management is essential for businesses to meet customer demand and optimize operations Insufficient stock can lead to missed sales opportunities, while excessive inventory can result in wasted capital and increased storage costs, potentially leading to damaged or obsolete goods Therefore, implementing a well-defined inventory policy is crucial to maintain an appropriate balance of stock.
Amount of money (Billion VND)
Goods are on the way 152 12.52 67 7.35
Provision for devaluation of inventory 2 3
Table 2 2 Table of inventory situation of KIDO Group 2019, 2020
Source: Financial statements of KIDO
In 2020, the company's inventory increased compared to 2019, necessitating a larger stock of goods Notably, raw materials comprised 39.7% of the total inventory, a decrease from 48.85% in the previous year.
In 2019, tools and goods represented a mere 2.96% and 2.56% of the total inventory, respectively, highlighting their minimal presence compared to raw materials This distribution indicates a focus on high-quality production and efficient operations.
In 2020, the cost of work in progress rose compared to 2019, indicating a need for improved production and quality control The share of finished products increased to 28.75%, up from 22.5% in 2019, while goods decreased to 0.1%, down from 0.21% the previous year.
In 2020, total inventory levels reflected more predictive market trends and improved business performance compared to 2019 The increase in raw materials was essential to ensure timely production and maintain a steady supply of goods in the market.
Table 2 3 Inventory turnover rate table
Source: Financial statements of KIDO
In 2020, the average inventory value of goods rose by VND 304.58 billion compared to 2019, indicating a significant increase in stock levels However, the turnover ratio declined by 0.73 times, highlighting a concerning stagnation of goods Additionally, the turnover rate in 2020 took 8 days longer than in 2019, reflecting a decrease in the company's inventory management efficiency.
2.2.3 Analyze the EOQ model at KIDO Group
Economic Order Quantity (EOQ) enables KIDO GROUP to determine the ideal order size that minimizes inventory-related expenses, such as holding and ordering costs By effectively reducing these costs, the company can enhance its profit margins.
Storing extra inventory can quickly increase storage costs Inventory costs can also go up depending on how you order, what gets damaged, and what products never sell
EOQ can help KIDO better understand how much you need to re-order and how often.
Calculating the Economic Order Quantity (EOQ) enables KIDO to optimize inventory management and storage decisions Many eCommerce businesses often rely on intuition rather than accurate data to determine order quantities, leading to inefficiencies in product management.
The limitation of using the economic order quantity EOQ is that the inputs to the
EOQ formula make an assumption that consumer demand is constant.
Calculations rely on the assumption that ordering and holding costs remain constant, complicating the analysis for various business scenarios These scenarios include fluctuations in consumer demand, seasonal variations in inventory costs, lost revenue from stockouts, and the potential for reduced purchase prices when acquiring inventory in bulk.
The FIFO (First In, First Out) inventory management method is ideal for perishable or short-term goods, including items with a limited shelf life, such as dairy products, confectionery, and food This approach is also applicable to fashion items and the latest technology products that are currently trending in the market.
Reduce inventory cost per product because goods do not stay in stock for a long time.
Always know the value of goods left in the warehouse and take the most appropriate handling measures.
Increases the chances of products being sold before the expiration date by reducing the amount of expired and overdue inventory.
Good quality control of goods before reaching consumers because goods are rotated continuously.
Minimizing the impact of inflation helps optimize profits for businesses.
To implement the FIFO strategy, the warehouse needs to be scientifically arranged, large storage space and many specialized equipment to support.
Regularly monitor your inventory carefully It is necessary to have a system to track goods in and out of warehouses.
Constantly having to update inventory with thousands of commodity codes in different locations, difficult in inventory and accounting operations.
Although FIFO reduces inflation leading to higher profits, it also leads to higher corporate income taxes.
Problem in inventory management at KIDO:
The import and export process can be complex, as it requires the storekeeper to verify the accuracy of essential documents such as the shipping order and delivery note These documents must be signed by the director or an authorized individual, along with the accountant and consignee Additionally, the storekeeper must ensure that the specifications of the goods align with their origin before signing off and releasing them from the warehouse.
The documentation system is flawed, lacking a dedicated column for the value of each machine type Instead, it only records the total value based on quantity, which complicates the process of assessing the individual worth of each machine.
The lack of clarity in the departmental structure at Kido Company has led to the absence of a dedicated receiving and checking department, which should operate alongside purchasing, storage, and shipping This department plays a crucial role in ensuring that all goods entering the warehouse comply with established quality and technical standards Unfortunately, its operations have not been adequately prioritized, resulting in potential quality control issues.
Inventory stagnation: The turnover rate is 8 days slower than the same period last year Proving that the company's inventory management is not stable and certain.
Due to the lax inventory management, KIDO has increased inventory costs in 2020 to 1,212 billion VND
Improve staff qualifications on inventory management: Organize short-term training courses on inventory for employees so that employees have basic knowledge of inventory management.
Apply the latest technologies to the warehouse to reduce waiting time as well as reduce waste costs.
Using electronic documents such as electronic warehouse receipts, error handling records, etc.
It is recommended to use a KANBAN method to reduce: Inventory stagnation:
Kanban is a visual tool that is ideal for managing inventory flow.
Kanban inventory management focuses on maintaining the minimum necessary stock levels, preventing over-purchasing and the need for excessive warehouse space Additionally, it effectively addresses workflow bottlenecks, streamlining processes for improved efficiency.
Applying Lean Six Sigma to KIDO Group
Customers frequently express concerns regarding the shipping of goods, noting that finished products often do not align with the descriptions provided on the website Additionally, issues such as damaged or lost items during transportation are common As a result, it is essential for the company to assume full responsibility for compensating customers for these product discrepancies.
1 Why does the company have many problems in the process of transporting products to customers?
- Due to not checking goods and products carefully.
2 Why does the company not check the goods carefully?
- Due to the poor handling and transportation of the goods, it is difficult to check the goods.
3 Why is the process of handling and transporting goods poor?
- Because employees do not apply the skills they have been trained to work.
4 Why don't employees apply the company's training program?
- Because the company does not follow the training process closely, there is no post- training evaluation for employees.
5 Why is the company not interested in evaluating and testing employees?
- Due to the poor coordination between the Training and Development department / Human Resources department and the Heads of the transportation department
The pandemic significantly impacted KIDO's food market, necessitating the company to maintain a high level of raw materials, goods, and finished products to ensure a steady supply for production and business activities This strategy resulted in excess inventory, which in turn increased costs related to storage and warehousing, ultimately leading to waste.
1 Why does KDC waste a lot of money on inventory?
2 Why has inventory become excessive?
- KDC's inventory management is not balanced
3 Why is the company's inventory management not balanced?
- Because the company does not have reasonable inventory processes and has not established a standard ordering method.
4 Why does the company not have these procedures and settings?
- Due to the lack of staff training programs, employees do not know the skills and rules needed to deal with problems.
5 Why is the employee training program rudimentary?
- Due to unnecessary planning by the management board, not following the actual needs of the company.
Motion: Workers having to move a lot between different spaces in the warehouse to check goods and finished products
1 Why do employees have to move so much?
- Because there is no means of support to move between different spaces.
2 Why are there no means?
- Because the management levels do not find reasonable measures to maximize the body's movement but not cause fatigue
3 Why don't management levels take measures?
- Due to the lack of research and surveys to analyze the problem and improve the process to optimize the operation of workers involved in production.
Production delays for waiting are primarily attributed to a shortage of raw materials, as essential ingredients like sesame and soybeans must be imported from various locations This reliance on external suppliers necessitates waiting for timely deliveries to the factory.
1 Why does the lack of raw materials lead to production delays?
- Because the transportation of raw materials is not arranged in a reasonable time to order and receive goods.
2 Why is the shipping not arranged properly?
- Because the management has no management method and has not established a reasonable order time.
3 Why is there no management method and no standard order time?
- Because the company does not apply research tools to determine the standard time to complete tasks and allocate appropriate human resources.
Overprocessing: Complicated inventory management process, using paper documents, through many steps of record keeping and confirmation leading to delays in the process of exporting and importing goods.
Why is the inventory process complicated?
- Because you have to go through a lot of paper documents.
Why through many paper documents?
- Because the company has not applied electronic documents
Why is the company not using electronic documents yet?
- Because the company has difficulty in technology transfer.
Why is it difficult for the company to transfer technology?
- Because of the lack of capital finance to buy equipment to simplify the inventory process
Overproduction occurs when businesses import more raw materials than necessary, leading to excessive inventory and stagnation In 2020, KIDO reported a raw material inventory of VND 482 billion, representing nearly 40% of its total inventory value This issue is not limited to manufacturing; for instance, restaurants often discard surplus food, which negatively affects their profitability.
1 Why import so many raw materials?
- Because the inventory count is wrong
3 Why is the inventory report wrong?
- Because staff check for errors
4 Why do staff check for errors?
- Because Employees do not periodically check, resulting in errors.
Defect: KIDO often occurs cases where cakes, ice cream, cooking oil are damaged or products that do not meet output criteria, damaged and distorted packaging will all be discard
1 Why are the products dented?
- Products get collided in the moving process
2 Why do the products collide while moving process?
- Workers are not careful enough when moving the final products
3 Why are workers not careful when moving the final products?
- For doing the operation quickly
- Because of the overload of work
Identify the root cause of manufacturing defects.
Establishing quality standards for each process is essential, as it allows for the evaluation of quality using statistical techniques such as check sheets By synthesizing errors through process statistics, organizations can assess whether a process is stable or unstable, enabling them to identify key areas for control and improvement.
Develop employee training program so that each worker is a quality checker.
Apply tools and models to eliminate waste due to errors/defects (PoKa Yoke method, etc.)
Improve and promote internal information between departments to help information quickly and accurately.
Develop a reasonable production plan to meet customer needs without causing waste; arrange workplace, production place, equipment - tools - raw materials so that it is safe and convenient for production
Establish measures to check that inventory is at appropriate levels
Fishbone Diagram (5M+E)
1 Why is the inventory excessive?
- Because the business has not balanced production
2 Why can't the business balance production?
- Due to the unreasonable arrangement of equipment and production clusters
3 Why is the arrangement of equipment and machinery not reasonable?
- Because management systems have not been applied and quality productivity improvement tools have not been used.
Conclusion: The manufacturing company is not balanced because it has not applied management systems and does not use quality improvement tools.
Solution: Adjust production, use kanban method in production to minimize product inventory, as well as no raw material inventory
Method: Not follow the procedure
1 Why not follow the procedure?
- Because the procedure is not taken seriously
2 Why is the procedure not taken seriously?
- Because the management does not enforce the procedures vigorously
3 Why not enforce the procedure vigorously?
- Due to lack of supervision
- Because there is no connection between the supervisory department and the departments in the warehouse system.
Conclusion : KDC has not paid attention to and lack of supervision of procedures as well as lack of coordination between departments, leading to an inefficient inventory system.
Solution: The company should focus on procedures and set up specialized monitoring departments to minimize problems affecting inventory.
Machine: use manual equipment system
1 Why use manual equipment system?
- Because old machines don't have many features
- Because the business does not have a plan to renew, maintain and upgrade equipment
3 Why is there no plan to renew the equipment?
- Because KDC is financially constrained
Conclusion: KDC uses old machinery and equipment that are not upgraded and maintained, the company is financially limited to invest in upgrading equipment
Solution: KDC should study the method of replacing equipment gradually, make a specific plan suitable with corporate finance for the maintenance and upgrade of the equipment.
1 Why is the working environment not good?
- Because of the stressful working environment
2 Why is the work environment stressful?
- Because employees do not know the information, processes
3 Why not know the information?
- Because employees lack interest in planning meetings
4 Why doesn't the staff care?
- Because employees are bored at work
- Because there is no suitable compensation and salary
Conclusion: The working environment at KIDO is not really good because employees have not received appropriate remuneration and salary.
To foster a positive workplace culture, the company should prioritize employee well-being by creating a friendly and supportive environment Implementing monthly and annual bonuses for high-performing employees can boost morale, while regular salary adjustments and transparent salary increase policies will ensure fair compensation and motivate staff to excel.
1 Why is the demand forecast wrong?
- Because of the wrong forecast of customer demand
2 Why is the forecast wrong?
- Because the staff performs the error check
3 Why do employees perform error checking?
- Because the support system has a problem
4 Why does the system have problems?
- Because using the old system does not guarantee the accuracy, the operation is not stable.
Conclusion: The forecast is wrong due to the old machinery system, unstable operation, and not checked and repaired in time.
Solution: The company replaces old equipment with modern machines There are a full range of tools and software to help improve and reduce time in the inventory management process.
1 Why are employees lack of competent?
- Because staff are not trained
2 Why are employees not trained?
- Because time constrains training of new employees
3 Why time constraints training of new employees?
- Because employees needed to start working as soon as possible
4 Why are employees needed to start working as soon as possible?
- Because large amount of work and short lead times.
In conclusion, the staff's limited training time has resulted in a lack of specialized knowledge in inventory management, which contributes to inefficiencies in the sorting process The current training for new employees only covers basic concepts, failing to equip them with the necessary skills for effective inventory handling.
To enhance efficiency in inventory management, the company should implement short-term specialized training courses focused on inventory processes, arrangement, and warehouse maintenance Additionally, conducting surprise checks will help prevent fraud and improve overall inventory control.