4.3.1 Forecasting and Ordering

Transcription

1 The more clearly figure to describe business process; it may be seen in figure 4.4 below. This figure tells the relationship between customer and supplier from the side of supply chain system. Figure 4.4 Business Process Model The business process of Hypermart could be explained by planning, execution and controlling activities (see figure 4.5). Each of those activities is: Planning Hypermart makes Purchasing Order (PO) based on calculating of forecast. The content of PO is about number of shipment, amount of quantity ordered, lead time, and address of desired supplier. Execution The suppliers are accepted PO, so suppliers should prepare invoice and the copy of PO, prepare shipping plan also with the transportation. After the transportation is ready, thus shipping plan is also ready to be carried out. Once the orders received by expedition

2 team, so the order s invoice and copy of PO is checked. If there are improper products caused by inappropriate products condition with Hypermart qualities, Hypermart would do RTV (return to vendor) and wouldn t accept them. Hence, the supplier would receive back return products and should deliver the new ones to Hypermart as soon as possible. Then, Hypermart will receive the products and control them either will be put in storage or display. Controlling After a little bit moment, Hypermart would check the condition of their products routinely. The quality decreased of the product, will be anticipated with discount given. And normal price will be set for good quality products. Figure 4.5 Hypermart s Business Process 4.3 Data Analysis The most important activity of inventory management in the Hypermart is forecast, ordering, receiving, holding and shelfing, and controlling.

3 4.3.1 Forecasting and Ordering The ordering system in Hypermart to the suppliers use kind of document called purchased order (PO), especially in fresh food division; the products ordering are set every day. Since the fresh food products are perishable and couldn t have long life time, so the department management should settle the ordering every day and replace as soon as possible the broken products. Hypermart did the order for vegetable everyday and for fruit depend on the inventory on hand (usually every four days). To determine quantity ordered, the policy used is based on intuition and historical data with consideration 10% increase on last year data. The products in every division classify into two categories, which are fast moving and slow moving products. The fast moving products ordered in more high quantity than slow moving. The categorizing of fast moving product is derived from quick turnover because it is the primary product that customers always need and bought; and the impact to Hypermart is gained profit quickly. The turnover also means that the sales of the products happen on regular time with regular price, not in the promotion time. It could be the high turnover of certain item only happened on promotion time but not in regular time since many customers utilize the momentum of promotion time to buy the cheap products. Fresh Food division does the order directly to the suppliers that have been selected by HO. In the promotion activities, the product promoted is determined by HO after HO attained an agreement with the suppliers about the price, then Hypermart decides the amount of quantity ordered. Catalogue and newspapers are media used for the products promoted. Catalogue is established every two weeks and newspaper has two period times in a week, which are Friday-Sunday period and Monday- Wednesday period. On the special occasions, for instance Ied Fitri, Christmas, New Year; Hypermart has its different way to do the forecast compared with regular time. The basis to forecast the demand is based on the last year sales data.

4 Then, in regular time, Hypermart uses the average data of last year sales plus intuition that it would increase as 10% - 20%. Theoretically, inventory model is on the below figure: Inventory depletion Total invetory Order size Average inventory ROP Safety stock Lead time Time Figure 4.6 Inventory model On figure 4.6, it shows quantity ordered received has same meaning as order size and it would always reduce because of sales. When the inventory is on ROP (reorder point), the company must order more stocks in order to prevent out of stock. Lead time is a factor that should be determined before the inventory arrives at safety stock level. Safety stock is secure point for a company in managing its inventory. In the real situation such as perishable inventory in Hypermart, the forecast never used theoretical theory Receiving The parties that relate to the receiving process are supplier, officer, checker, expedition team, EDP (electronic data processing), and staff/spg. Those parties are responsible to report each activity of receiving. Generally, all departments of Fresh Food division have different way in receiving the products with other departments. Since the products of Fresh Food have limited life time, so the party in charged to check the product quality must be experienced and it should be checked accurately. The person in charged to check the quality is usually the staff or SPG from the department.

5 The supplier must have followed the regulation and standardization of Hypermart, which deliver the order punctually and carry high quality products. In fact, Fresh Food division has problem with the supplier in time delivery. The supplier is often late delivered the orders. It makes delay store opening of load the display and could cause out of stock. The display should present in the display before the store open. Store open at 10 A.M and the products ordered have to be delivered sooner. The stage of receiving process in Hypermart BIP starts from PO and invoice checking by expedition team. Next, supervisor fills the Report listing of Receipt Shipment and if it completes, it can be passed to checker in order to check the quantity and quality. When there is gap between products received and product ordered, so checker would make correction of the PO by supplier knowing. After that, expedition team will validate the orders and give the stamp which means that the orders are officially accepted. The administration of expedition team or EDP (Entry Data Processing) then would input the number/volume of product received by using RITEK system. There are three copies of PO and invoice that are for supplier, expedition team, and EDP. The correction of inappropriate data with PO will be corrected in EDP and it will be inputted to the RITEK. The staff will put the products received into storage; and display them to the area. The holding products called as buffer. Staffs are helped by SPG in filling the shelf in the morning before the store opens. FIFO system is applied in shelfing arrangement. The process of receiving is described in figure 4.7: