Developing Understanding of Lean Operations in Warehouse Industry of Pakistan based on The Case Study of Kopak Paints And Chemicals

Abstract

The main role of the warehouse is to handle supply and demand, minimize the cost of the supply chain network, maintain a high degree of inventory control and increase the customer service level. The efficiency of the operation increases when companies implement the best warehouse practices (such as lean warehouse management) coupled with optimum inventory management, which result in decreased operational costs. There are two objectives of this project, one is to analyze the warehouse industry of Pakistan, and the second is to conduct a detailed warehouse layout and Inventory management analysis of the target company. A descriptive analysis of the warehouse industry in Pakistan has been conducted and the results show that majority of the companies are unaware of warehouse best practices. Hence, not surprisingly the warehouse operations result in low operational efficiencies. There is a lack of education in the warehouse industry of Pakistan. Some companies' warehouse staff are using lean practices but do not know the exact name of the practice. In the second part of the project, a detailed inventory analysis of KOPAK Paints and Chemicals was conducted. It was found that they have an excess inventory of Paint shades which are no longer in demand. Rather than focusing on keeping safety stock for in-demand and fast-moving SKUs, the company is holding excessive safety stock for all SKUs. Furthermore, in the project EOQ, safety stock and re-order points were calculated to maintain the optimal level of inventory and the warehouse layout was designed using the ABC/XYZ analysis.