Mapping of material and information flows of Getinge Disinfection AB and ABC analysis of SSC warehouse

Sammanfattning: Abstract Degree project advanced Level - Business Administration, School of Management and Economics at Linnaeus University, Business Process and Supply Management, 4FE02E spring 2010 Authors: Lejla Beslagic, Tatiana Veretennikova, Tesfaye Beykasso, Md. Masum Sarker Tutor:      Helena Forslund and Roger Stokkedal Examiner: Helena Forslund Title: Mapping of material and information flows of Getinge Disinfection AB and ABC analysis of SSC warehouse Background: Background provides the information about current situation of the material and information flows between GDs internal warehouse and rented one (SSC). Under the material flow theory, warehouse functions like: movement, storage, and information transfer are presented.  Mapping of all processes by flowchart provides visual picture of the all activities. By analysing warehousing functions of GD, we can identify treatement areas and suggest ways of improvement. When it comes to the categorization of the SKUs in rented GDs warehouse (SSC), we used ABC analysis and ABC/ XYZ classification and classified SKUs based on criteria: production line demand frequency and sales volume of each SKU, Locating the SKUs in the right place could help the GD to manage space utilization in a proper manner.  It will create possibility to cut spending on extra storage space, and transportation. On the other hand GD’s business can operate without interruptions in the production line. Effective warehouse management involves a through understanding of the functions of warehousing. Firms may choose to perform these functions utilising public or private warehouse facilities. Each option has advantages as well as disadvantages, which must be understood so that warehousing decisions are made. Warehousing decisions also depends on financial and service aspects of warehousing decisions. In the last part of this paper, we have discussed it using different financial and operating criteria.       Research questions:   RQ1: How can the material and information flows between GDs internal warehouse and rented one (SSC) be mapped by flowchart and providing suggestions for identified treatment areas? RQ2: Which SKUs should GD store in internal warehouse and which in rented warehouse (SSC) by using ABC analysis on the basis of production line demand frequency and sales volume of SKUs? RQ3: What can be recommended for the future of GD; to build a new tent outside of the plant or to continue to rent SSC warehouse? Objectives of the study: Map the material and information flows between GDs internal warehouse and rented one (SSC) with the help of flowchart and identification of treatment areas in all those processes, and also providing of recommendations for the future improvements. We also determined the location of GD SKUs according to the picking frequency of its production line demand and sales volume of SKUs in rented GDs warehouse (SSC) based on ABC/ XYZ classification. Discuss costs, benefits and risks relating to GDs internal warehouse and rented one (SSC) based on financial and operating criteria; and recommend to GD a suitable one. Methodology: Our thesis was written with positivistic and deductive scientific approach because it begins with finding of relevant theory, then collect data which are considered as objective facts. Empirical findings are combined with the theory to answer on our research questions. The quantitative and qualitative methods were applied, due to the fact that we obtained numerical data from financial department of GD to do ABC analysis and qualitative data through interviews and observations of GDs warehouses, to meet present situation between GD and SSC. Both primary and secondary sources were used for collecting empirical data by using scientific literature, interviews, and questionnaires. We used tables, flowcharts and diagrams for mapping the material and information flows between GD and SSC as well as ABC analysis presentation.  Scientific credibility of this thesis was assured through using of multiple sources of evidence, and also interviews and observations were followed and data adjusted by four people (group members). Conclusions: Three research questions were answered during this thesis. All of them have close relation to each other, and undertake existing problems in GD. The first question is concerning mapping of the material and information flows between GDs internal warehouse and rented one (SSC) which helped to identify the treatment areas in the mapped processes, and provide suggestions for future improvement. The second question is regarding location of SKUs of GD with the help of ABC analysis and ABC/ XYZ classification. The third question analyzes possibility of building new tent near to the GDs internal warehouse based on financial and operating criteria. Our analysis could be useful basis for future decision making of GD. Suggestions for future research: Regarding to the future research a lot of areas could be assessed. The layout of the GD facilities demands more attention. Based on identified treatment areas, deeper investigation on storage system of GDs internal warehouse and tent that GD already has outside the plant, has to be carried out.   Another significant area of the study is to continue to do ABC analysis of the SKUs, not only in the rented (SSC) warehouse, but also for entire GDs SKUs. This analysis will provide them an opportunity to organise the right location of their SKUs on the right place more efficiently.   Further research can also be done in the area of warehouse management. If GD finally decides to build a new tent close to the production line, new investments have to be analyzed deeper, for instance: returns from investments efficient utilisation of spaces, future possible expenses, warehousing costs and service level in future tent. On the basis of those analyses, GD can forecast more precisely the possibility of building new private warehouse. .