9th North American Conference on Industrial Engineering and Operations Management

Improvement Model to Increase the Service Level of a SME Coffee Producing Company with the Application of Centroid Method, ABC Analysis and Kanban

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Abstract

The present work shows the study of a small company dedicated to the roasting and packaging of coffee in 250 gr and 1 kg bags, being its main bottleneck the capacity to deliver the product to its customers, originating a service level of 79% and with an economic impact of approximately USD 56,329 per year. Through the diagnosis, it was found that the main reasons were the unlimited flexibility for order fulfillment caused by the lack of inventory, since the demand is variable; the second reason was the loss of time in the delivery of orders, due to disorganized routes, large number of trips and lack of order tracking. To address these problems, an improvement model was developed based on the implementation of the Centroid Method and Kanban to organize orders and propose delivery routes, reducing time and transportation costs. In addition, the ABC Analysis will be implemented to determine the most demanded products. For validation purposes, a two-week pilot was carried out, which showed an improvement in the level of service to 93%, making end consumers more satisfied with the company's response. On the other hand, the products with the highest turnover in the company were identified by applying the ABC Analysis. This demonstrated that a good application of engineering tools has a positive impact on the company's efficiency. Finally, the project was evaluated with @RISK to demonstrate that even in a pessimistic scenario, it has good results.

Published in: 9th North American Conference on Industrial Engineering and Operations Management, Washington D.C., United States

Publisher: IEOM Society International
Date of Conference: June 4-6, 2024

ISBN: 979-8-3507-1736-5
ISSN/E-ISSN: 2169-8767