INVENTORY CONTROL

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Method and implementation

This chapter explains the different methods and techniques used to gather and analyze the data for this thesis. This chapter is divided in different sub-chapters: Work process, Case study, Data gathering, Analysis of data and the last part Reliability and validity.

Connection between research questions and method

To answer the research questions a literature study and a case study have been conducted. These studies were necessary in order to investigate the units of analysis due to the delimitations of this thesis. The empirical findings from the case study and theories from the literature study were used to find the answer to the first research question. The identified factors in the first research question were then analysed with the theoretical framework in order to answer the second research question. Figure 3 presents what kinds of method used for each of the following research questions.
Data necessary to answer the first research question consisted of interviews, document studies, observations and a literature study. The reason was to collect data regarding the supermarket system and the case company’s procurement system. These methods are connected to the research approach chosen by the authors. The second research question has a different approach which originates from the literature study and the result of the case study. Both methods and approaches are described in detail later in this chapter.

Work process

This study is divided into five major phases. First is the planning report, where an introduction meeting with the case company and information retrieval were conducted. After the planning report was initiated the case study began. Literature study and method and implementation phases were conducted simultaneously. After that, the data was collected and sorted and the analysis phase could start. The time scope of the work process is shown in Figure 4.
During the start of the case study it was necessary to create an idea of an interesting subject to investigate. The case company was contacted for an introductory meeting and a tour of the company´s factory. By these activities the authors were able to create a problem description followed by relevant research questions that needed to be determined to fulfill the planning report.
After the purpose with following research questions were stated, the authors decided what kind of methods should be used to collect and analyze the data. The next step was to create and gather an outline of the theoretical framework. All these sections, background, problem description, purpose and research questions, method, theoretical framework and a time line were used to compile the planning report. After an approved planning report, the authors started the analysis phase. The quantitative data were analyzed and sorted in Excel. The next steps were to compare the data with the theoretical framework and later analyze it in order to answer to first research question.
The discovered factors from the first research question were the basis of the second research question. The original theoretical framework related to the second research question was based on the authors predetermined knowledge about the subject. Based on the new findings the theoretical framework was updated to be further, connected to the second research question.
When the second research question was answered the discussion and conclusion chapter was conducted. The authors own reflections and thoughts regarding chosen methods and the result were then discussed. When the thesis was approved a presentation were conducted.

Research approach

To answer the first research question it was necessary to identify factors that had an impact on the supermarket inventory level. When more empirical facts were discovered the collected data was updated and analyzed against the theoretical framework, this is called an abductive approach (Olsson & Sörensen, 2011; Patel & Davidson, 2011). The second research question has a deductive approach because its starting point is in theories discovered in the first question about the reality (Olsson & Sörensen, 2011). When the factors that answered the first research question were discovered, methods and tools that could control the impact of the factors were determined. The authors also had some preconceptions about the answer to the research questions because the field of study is well known and rather than wait for a concept to emerge it was more time efficient to start with basic concepts (Yin, 2009).
To get a deeper grasp both qualitative and quantitative methods were used. This was in order to get a wide collection of data both from employees and the company´s database. This was done because it gave the authors knowledge about what the employee’s thoughts about possible factors that had an impact on the supermarket inventory level and then compare it with the outcome of the document studies (Holme & Solvang, 1997). A combination of qualitative and quantitative, thus mixed method, is used when the research questions are complex and need a combination of both to be able to find a solution to the problem (Lund, 2012).

Case study

In order to answer the research questions and to fulfil the purpose of this thesis a case study was conducted. A case study is a research that studies a phenomenon in a real-world context (Platt, 1992; Yin, 2009; Yin, 2011). The selection of case company was a relevant choice because it stands before an increase of production volume and has identified problems within the supermarket inventory levels, which supplies a manufacturing line. To understand and identify the problems, observations on the company´s material flow and procurement system were conducted. This was done in order to do an embedded single analysis. The case company is a multinational manufacturing company in the truck industry. This case study was conducted at the case company’s assembly line factory located in Bangkok, Thailand. There are approximately 190 employees working in the factory. The factory has several production lines that are part of the final assembly of trucks.
In cooperation with the case company it was decided that the authors should pick the sample of goods by themselves, but with some conditions. The reason was to find goods that could cover a broad selection of the case company’s assortment, which means goods from different regions, price, size and features. The selection of parts was made at the supermarket to ensure that the chosen parts were used on a daily basis in the manufacturing line. The sample was discussed in cooperation with the case company, where a suitable mix of parts to be analysed was determined.

Data collection

Different techniques have been used in order to collect necessary data including documentation studies, interviews, observations and basic training in the case company’s procurement system (GILM). Methods presented below were used to gather relevant data and to answer both research questions.

Literature review

Studies in relevant literature were performed to create a theoretical framework and also to find possible techniques that could help the authors to answer both research questions. Underlying theory that introduces the reader to basic logistic subjects is presented under the Theoretical Framework. The studied literature consisted of printed books and scientific articles linked to the field of study. Google Scholar and the homepage of Jönköpings Library were used as search engines. The articles were then available through these databases, Science Direct, Tylor & Francis and Emerald. Certain keywords were supermarket system, supply chain, inventory control, material flow, replenishment systems, push and pull. To get the right translations from Swedish to English, Plans logistics lexicon was used.

Interviews

Interviews were held with hand picked employees and those recommended by the authors’ contact person at the case company. This was done to get an overview regarding the function of the procurement system and the internal material handling. The objective with the interviews was to find out what they believe to be the factors that have an impact on the supermarket inventory levels supplying the manufacturing line. In order to start with GILM, two interviews were dedicated just to learn the basics of the program. Those interviews were considered as explorative as the authors had no previous knowledge of the program. The other interviews were of semi-structured character and held during the case study, in March and April. In Table 1 the interviews are listed in chronological order.
Employees from different departments were relevant to interview because they had knowledge regarding different processes in the supply chain. It was necessary for the authors to understand the inputs and outputs of materials supplying the supermarket. The authors have chosen to use interviews because it provides data that is hard to observe when doing a case study (Yin, 2011).

Observations

To answer the first research question observations in the factory were made. By observing the supermarket system the authors collected primary data. It was necessary for the authors to observe the internal material flow to gain more knowledge about the supermarket system. Through observations of the supermarket system the selection of parts that later was analyzed during the case study were chosen. The observations were held during the case study and are listed chronologically in Table 2
According to Yin (2011) observation is a good way to collect data because you get an opinion of your own which has not been interpreted by someone else. Except from the first tour in the factory where the authors were guided, all observations were made by them selves. By observing the internal material flow without guidance, the authors were able to collect primary data on their own without being affected by someone else’s opinions. The chosen processes to observe were determined by the authors where focus was to gain knowledge and increased understanding of the internal material flow.

Document studies

Documents from the case company’s internal material handling system were studied to form the basis of our calculations that lead to this thesis quantitative result. These documents contained information regarding the re-order quantities of the supermarket system. In GILM the authors selected which data considered important, which were in assistance when answering both research questions. From GILM a print of each part characteristics were drawn, shown in the Appendices. These documents were then sorted and analyzed in Microsoft Excel, along with the data from the internal material handling system.

Data Analysis

The theoretical framework was retrieved during the literature study and the empirical data from the case study. The data retrieved from the observations and interviews were transcribed and evaluated by the authors and then controlled by the case company. The data from GILM has been consolidated and then sorted and analyzed. In order to come up with the result of this thesis the collected empirical data was compared with the theoretical framework. According to Trochim (1989) pattern matching is a method where an attempt to match a specification of a theoretical pattern with the acquisition of an observed pattern. The pattern matching method can be seen in Figure 3.

Contents
1 Introduction 
1.1 BACKGROUND
1.2 PROBLEM DESCRIPTION
1.3 PURPOSE AND RESEARCH QUESTIONS
1.4 SCOPE AND DELIMITATIONS
1.5 OUTLINE
2 Theoretical framework 
2.1 CONNECTION BETWEEN RESEARCH QUESTIONS AND THEORY
2.2 SUPPLY CHAIN
2.3 INVENTORY CONTROL
2.4 WAREHOUSING
2.5 EIGHT KINDS OF WASTE
2.6 JUST-IN-TIME
2.7 POSTPONEMENT
3 Method and implementation
3.1 CONNECTION BETWEEN RESEARCH QUESTIONS AND METHOD
3.2 WORK PROCESS
3.3 RESEARCH APPROACH
3.4 CASE STUDY
3.5 DATA COLLECTION
3.6 DATA ANALYSIS
3.7 RELIABILITY AND VALIDITY
4 Empirical data 
4.1 CASE COMPANY DESCRIPTION
4.2 INTERNAL MATERIAL FLOW
4.3 GILM0
5 Empirical analysis 
5.1 RESEARCH DIMENSIONS
5.2 RESEARCH QUESTION I
5.3 RESEARCH QUESTION II
6 Discussion and conclusions 
6.1 DISCUSSION OF RESULTS
6.2 IMPLICATIONS
6.3 LIMITATIONS
6.4 CONCLUSIONS
6.5 FURTHER RESEARCH
References
GET THE COMPLETE PROJECT
Factors that Impact Inventory Levels in a Supermarket System Supplying a Manufacturing Line

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