Abstract

Effective inventory management is critical for firms to maximize efficiency, minimize waste, and maintain a healthy financial position. This research investigates the causes of medicine expiration in the warehouse setting. Expired medications not only represent a waste of resources but can also pose safety risks if inadvertently distributed. Understanding the root causes of expiration is a crucial step towards improving warehouse operations and inventory control. The research applies several analytical techniques to diagnose the problem. ABC analysis is used to categorize medicines based on their annual usage value, allowing the team to focus on the most critical inventory items. Turnover ratio calculations provide insights into the velocity at which different medicines are sold, highlighting slow-moving stock that is prone to expiration. A fishbone diagram is constructed to systematically explore the potential causes of expiration, covering factors such as forecasting accuracy, storage conditions, packaging, and supplier reliability. Finally, a Pareto chart is leveraged to identify the vital few medicine categories that account for the majority of expiration issues. Through this multifaceted approach, the project team is able to uncover several key drivers of medicine expiration. Inaccurate demand forecasting emerges as a primary culprit, leading to the procurement of excess inventory that exceeds shelf-life. Suboptimal storage conditions, such as forecasting and sales, also contribute to accelerated degradation of certain medicines. The findings of this work have broader implications for inventory management practices across various industries.