Optimizing Stock-out in a SME Supermarket via Improving Inventory Management
Weerarathna, Upul W.A.P. (2025)
2025
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2025112830528
https://urn.fi/URN:NBN:fi:amk-2025112830528
Tiivistelmä
The objective of this thesis is to optimize the stock-out in small and medium-scale supermarkets via inventory management. There is a manual process involved in checking the availability of the SKUs by visual inspection of shelves, stores, bin cards, and the stock ledger in the system. The current system is not a fully-fledged ERP system and was developed by an Indian software firm some time ago. These stock-outs affect the business negatively, as they damage its reputation due to customer dissatisfaction, sales, profits, and overall working capital management.
The study follows the applied research action approach and uses qualitative research methods in the process of developing a solution to the problem. The data was collected via interviews with relevant stakeholders and internal documents and stock data. The theoretical framework that was used to build a conceptual framework focused on the topics related to inventory management and control.
The outcome of this study is a proposal for more cost-effective inventory management and control based on ABC inventory categorization. The proposal mainly consists of (1) utilizing system data and categorizing SKUs as per the ABC categorization; (2) aligning the replenishment of stock-out SKUs by prioritizing Class A, B, and C, respectively; and (3) streamlining the inventory month-end audit by introducing ABC categorization based on periodic counts on a weekly, bi-weekly, and month-end basis.
As a result of this proposal, the company is in a position to identify fast-moving SKUs, SKUs with higher gross profit margin percentage, and slow-moving products that tie up working capital. Further, it can save costs on sourcing urgent cash-based purchases, warehousing, and finance costs due to minimizing the risk of purchasing excessive quantities of the slow-moving SKUs. Also, the data analysis can be useful for the management to plan promotions and price discounts to make it more attractive to the customers.
The study follows the applied research action approach and uses qualitative research methods in the process of developing a solution to the problem. The data was collected via interviews with relevant stakeholders and internal documents and stock data. The theoretical framework that was used to build a conceptual framework focused on the topics related to inventory management and control.
The outcome of this study is a proposal for more cost-effective inventory management and control based on ABC inventory categorization. The proposal mainly consists of (1) utilizing system data and categorizing SKUs as per the ABC categorization; (2) aligning the replenishment of stock-out SKUs by prioritizing Class A, B, and C, respectively; and (3) streamlining the inventory month-end audit by introducing ABC categorization based on periodic counts on a weekly, bi-weekly, and month-end basis.
As a result of this proposal, the company is in a position to identify fast-moving SKUs, SKUs with higher gross profit margin percentage, and slow-moving products that tie up working capital. Further, it can save costs on sourcing urgent cash-based purchases, warehousing, and finance costs due to minimizing the risk of purchasing excessive quantities of the slow-moving SKUs. Also, the data analysis can be useful for the management to plan promotions and price discounts to make it more attractive to the customers.