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Warehouse stocks and replenishment A case study of stock levels at the National Distribution Centre, Arla Foods UK

Borgström, Ulrika and Lind, Charlotta (2011) MIO920
Production Management
Abstract
The purpose of the master thesis is to optimize the stock holding levels of Arla Foods´ products in the National Distribution Centre in Leeds, by constructing a replenishment model for selected products. Deliverables: The focus of the master thesis has been to develop a replenishment model in order to better control and reduce the stock levels. Methodology: We focused primarily on gaining a deeper understanding of knowledge about the project and the related theories. In addition we met both our supervisor and our practical supervisor at Arla Foods in order to understand their aims and hopes for the project. This preliminary work made it easier for us to formulate the direction of the master thesis.
Our first month at Arla Foods focused on... (More)
The purpose of the master thesis is to optimize the stock holding levels of Arla Foods´ products in the National Distribution Centre in Leeds, by constructing a replenishment model for selected products. Deliverables: The focus of the master thesis has been to develop a replenishment model in order to better control and reduce the stock levels. Methodology: We focused primarily on gaining a deeper understanding of knowledge about the project and the related theories. In addition we met both our supervisor and our practical supervisor at Arla Foods in order to understand their aims and hopes for the project. This preliminary work made it easier for us to formulate the direction of the master thesis.
Our first month at Arla Foods focused on a massive data gathering and analysis. This part of the master thesis needed to be done in order to be able to select some products for an in-depth investigation. When products were selected for further investigation the empirical study could begin. Interviews with people in the planning department, where decisions concerning placing orders are made, were essential to gain an understanding of the process from placing an order to delivery to customer. The next step in the procedure was to use the theoretical studies together with the background information about the products to create a replenishment model. Guidance from our supervisor Sven Axsäter at the University was most helpful during this process. Conclusions: A replenishment model was created to optimize the stock levels. The constructed model takes several parameters into consideration when determining the order quantity. The model has been developed with reference to the ordering policy currently in use at Arla Foods in line with the ordering policy that Arla Foods is using today. The model can be rolled out across other products provided that these products meet the assumptions that have been described in the report. The new replenishment model will facilitate control of the inventory levels. Implementation of the new replenishment model could result in computerising some work tasks which are currently manual tasks. However it is important to understand that manual tasks cannot be completely replaced (i.e., the model sometimes needs manual adjustments when large and rapid fluctuations in demand appear). With this exception, we have concluded that the model will result in reduction of stock levels while at the same time maintaining a high service level. (Less)
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author
Borgström, Ulrika and Lind, Charlotta
supervisor
organization
course
MIO920
year
type
M1 - University Diploma
subject
other publication id
11/5388
language
English
id
1970524
date added to LUP
2011-06-17 08:05:48
date last changed
2011-10-12 14:19:58
@misc{1970524,
  abstract     = {The purpose of the master thesis is to optimize the stock holding levels of Arla Foods´ products in the National Distribution Centre in Leeds, by constructing a replenishment model for selected products. Deliverables: The focus of the master thesis has been to develop a replenishment model in order to better control and reduce the stock levels. Methodology: We focused primarily on gaining a deeper understanding of knowledge about the project and the related theories. In addition we met both our supervisor and our practical supervisor at Arla Foods in order to understand their aims and hopes for the project. This preliminary work made it easier for us to formulate the direction of the master thesis.
Our first month at Arla Foods focused on a massive data gathering and analysis. This part of the master thesis needed to be done in order to be able to select some products for an in-depth investigation. When products were selected for further investigation the empirical study could begin. Interviews with people in the planning department, where decisions concerning placing orders are made, were essential to gain an understanding of the process from placing an order to delivery to customer. The next step in the procedure was to use the theoretical studies together with the background information about the products to create a replenishment model. Guidance from our supervisor Sven Axsäter at the University was most helpful during this process. Conclusions: A replenishment model was created to optimize the stock levels. The constructed model takes several parameters into consideration when determining the order quantity. The model has been developed with reference to the ordering policy currently in use at Arla Foods in line with the ordering policy that Arla Foods is using today. The model can be rolled out across other products provided that these products meet the assumptions that have been described in the report. The new replenishment model will facilitate control of the inventory levels. Implementation of the new replenishment model could result in computerising some work tasks which are currently manual tasks. However it is important to understand that manual tasks cannot be completely replaced (i.e., the model sometimes needs manual adjustments when large and rapid fluctuations in demand appear). With this exception, we have concluded that the model will result in reduction of stock levels while at the same time maintaining a high service level.},
  author       = {Borgström, Ulrika and Lind, Charlotta},
  language     = {eng},
  note         = {Student Paper},
  title        = {Warehouse stocks and replenishment A case study of stock levels at the National Distribution Centre, Arla Foods UK},
  year         = {2011},
}