Kantine Vending Machine LLC Inventory Optimization

Author

John GardnerFollow
David RezkallaFollow
Gabe GiraldoFollow
Jordan Moon

Date of Submission

Fall 12-6-2021

Project Type

Senior Design

Major

Industrial and Systems Engineering

Department

Industrial and Systems Engineering

Committee Chair/First Advisor

Dr. Khalid

Abstract

Kantine Vending LLC is a local vending machine company in Conyers, GA. In their current state they have 4 machines and are looking to expand in the future. They hold over 70 different products in stock. The idea of the project began when Kantine received customer complaints of purchasing expired products from one of the machines. Our team then sought to improve the company’s inventory system to minimize expired product, reduce waste, improve product flow, and lower stocking times. To achieve these goals, we looked to use methods and ideologies such as lean warehousing, 5s, First in First out (FIFO), inventory target points, EOQ, and inventory management software.

To start we divided the work into three main categories: Inventory management software, warehouse organization, and inventory optimization. The first step was the inventory managements system and barcode scanner. We then developed a simple inventory database using Microsoft Access and a barcode scanner. This allows Kantine to scan products in and out and gives an exact overview of current total inventory. For the warehouse we expanded storage capacity and organized the warehouse with products arranged in the order in which they are stocked in the machines. We also utilized 5s principles by ensuring every item had a labeled location on the shelf as well as integrated barcodes on the shelves themselves to ease the use of the inventory software. The chips were given a simple Fifo loading system with new product being placed in the back pushing older products forward to be stocked. We then built upon this by calculating our inventory target levels.

Our team gathered over a months’ worth of data for the demand of each product by utilizing the sales report from the all the machines. By using the demand of each product, we could calculate our inventory minimums and maximums as well as our reorder point. We also utilized the Economic Order Quantity (EOQ) formula to determine how much of each product to purchase when inventory levels reached our reorder point. With these calculations we can ensure products are in stock to meet our demand as well as reduce waste. With the improvements to the warehouse and the introduction of an inventory database the process of stocking the machines and monitoring inventory levels was simplified.

The results of our efforts can be seen in the improvement to the time spent reordering products and restocking inventory. The combination of the introduction of an inventory database, and the inventory calculations combined with a decrease in purchase order frequency has resulted in a 35% monthly reduction in time required to place purchase orders from the supplier.

Similarly, the reorganization of the warehouse through 5S and FIFO has resulted in a 20% decrease in time required to stock inventory.

Through the use of inventory target points and EOQ we can hope to see a reduction in product waste and perhaps even a decrease in cost in the long term. We can also expect to see a reduction in product outage. Overall, Kantine Vending LLC’s inventory management system is now more robust, efficient, and reliable than ever