The document discusses effective inventory planning and control strategies for a corrugated box manufacturing plant. It provides an overview of the company profile and facilities. It then defines the current problems with raw material procurement and storage capacity. The objectives are to forecast demand, revise the replenishment policy and create a new master production schedule. The methodology involves data collection, forecasting analysis using Holt's, seasonal and moving average models, and comparing the existing versus proposed replenishment policies and schedules. The results show implementing a revised policy with domestic materials procured twice monthly improves inventory management.

1. EFFECTIVE INVENTORY PLANNING AND
CONTROL STRATEGIES FOR A CORRUGATED BOX
MANUFACTURING PLANT
Presentation by-
Aayush Madan 1RV11IM070
Lohit Imagoudnavar 1RV13IM404
WADPACK PVT. LTD.
Under the guidance of –
Dr. Vijaya Kumar M N
Associate Professor
Dept. of IEM
Mr. Vibhu
Manager – Purchase
Wadpack Pvt. Ltd.

2. CONTENTS
•Introduction
•Process flow
•Problem definition
•Objectives
•Literature review
•Methodology
•Comparison ( Existing v/s Proposed)
•Implementation
•Results
•References

3. Company Profile
Wadpack Pvt. Ltd is a company engaged in
manufacturing of Corrugated Fiber Board Boxes and
corrugated pallets. The company was incorporated in
1976 and has its manufacturing plant located in
Doddaballapur, Bengaluru.
The unit located in phase II of the apparel park, in
the upcoming industrial zone of Bengaluru, on a site
of approx 225000 sq.ft, with a built area of 75300
sq.ft.

4. Facilities and capacities:
 Three color Flexo Printing, Slotting & Die cutting options.
 Glued and stitching option for Manufacturers Joint , the largest installed
capacity in the country (60,000MT per annum).
 The Company has an annual turnover of 90 crores.
 The major customers are FMCG (Fast Moving Consumer Goods).
and Tobacco exports, Apparel Exports and Wide Goods.
The customers are scattered all over the southern part of India;
• Karnataka: Bengaluru, Hosur, Attibele, Jigni, Mysore and Bidadi.
• Tamil Nadu: Chennai, Tripur, Erode, Karur and Theni.
• Andhra Pradesh: Secundarabad.
• Kerala: Munnar and Cochin.
• Maharashtra: Pune.

5.  Raw materials suppliers are from indigenous Paper mill industries from all
over India. The company has 5-6 domestic suppliers from areas such as
Mysore, Gujarat, Pune etc.
 The company also imports raw materials according to the customers’
specification from Europe, the US and Scandinavian countries.

6. Warehouse
Suppliers of raw
material
Printing and Stapling of
boxes
Customers
PROCESS FLOW

7. Problem definition
The service offering of Wadpack is the production and
delivery of 3-ply, 5-ply and 7-ply corrugated boxes. The
company has a raw material storage capacity 1380MT. The
procurement often goes above this fixed capacity and there
is no space for the storage of the raw materials. The
company currently uses benchmarking techniques for the
procurement of raw materials.
The material procurement is subjected to the following
constraints:
– The raw material storage capacity is 1380 MT.
– Lead time of the procurement of raw materials is 2-5 days for
domestic suppliers and 45-90 days for international suppliers.
– The international suppliers can supply only once a month.

8. 2,844
2,530
2,799
2,992
3,158
2,750
2,745
2,715 2,718
2,772
2,711
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16
Opening stock
MT
Warehouse capacity 1380MT
INVENTORY LEVEL

9. Objectives
• The Objective of this project is to establish a
good material procurement planning and to
apply material requirement planning for the
company
– To forecast the future demand.
– To revise the replenishment policy of the
company.
– To create and implement a new Master
Production Schedule according to the revised
replenishment policy.

10. Literature review
• Material Requirement Planning
• Forecasting

11. Material requirement planning
Paper No. Title of the paper, Author and
date
Remarks
01 Material requirement planning,
Dr Vassilis Moustakis, 2000.
This paper explains what MRP and its
objectives are. It provides the
methodologies of MRP and
organizational measures for effective
implementation of MRP.
02 Improving efficiency of
Material Requirement
Planning And Safety Stock: A
Case Study of Creative
Machatronics Co., Ltd.
Chantana Thongma, Ungul
Laptaned. 2007.
This paper investigates the characteristic
and implication of the reel going out of
stock. This paper uses collaborative
planning, forecasting and replenishment
to solve the problem.

12. Paper No. Title of the paper, Author and
date
Remarks
03 Focusing material requirements
planning (MRP) towards
Performance, Gerhard Plenert,
1998.
This paper looks at the successes and
shortcomings of MRP. Numerous articles
are studied to determine the key
shortcomings of MRP. Next, it
investigates if these failures are
correctable and the consequences of not
correcting these deficiencies.
04 Optimal Inventory Control in
Cardboard Box Producing
Factories, Catherine D. Black,
2004.
This thesis is a case study in optimal
inventory control, applied to Clickabox
factory. The problem of developing a
decision support system for optimal
stockholding at the factory, in order to
minimize cardboard off-cut wastage
subject to required service levels,
is addressed in this thesis.

13. Forecasting
Paper No. Title of the paper, Author and
date
Remarks
01 PRINCIPLES AND
TECHNIQUES
OF MANAGING
INVENTORY,
Mr. J. O. Kyei, Mr. Samuel
Boateng, Mr. Peter Gyimah,
2008.
The paper discusses the different types
of forecasting methods based on
historical data of sales, such as simple
average, moving average, seasonal
indices.
02 Demand Forecasting, Resource
Planning and Procurement
Strategy: Review and Sample
Case, Mr. Pavel Bondarev ,
2012.
The paper discusses about the steps for
forecasting:Time-Series statistical
(quantitative) forecasting methodology .

14. Paper No. Title of the paper, Author and
date
Remarks
03 INDUSTRIAL STATISTICS
AND OPERATIONAL
MANAGEMENT: Forecasting
techniques,
Dr. Ravi Mahendra Gor, 2005.
This paper gives us the importance of
forecasting and then provides the
techniques that should be followed for
effective forecasting. The paper uses
qualitative methods, time series
methods and casual methods for
forecasting.
04 Use of Statistical Forecasting
Methods to Improve Demand
Planning, Marcel Baumgartner,
2004.
The paper discusses the forecasting
technology for seasonal and Trend
demand : Seasonal linear regression and
holt’s method based on the sales graph.

15. Data Collection
• Sales and Procurement data
Classification of Demand
Forecasting
Master Production Schedule
Inventory records
Implementation
Results
METHODOLOGY
MATERIAL REQUIREMENT PLANNING
Domestic and
International
Holt’s, Seasonal and
Moving average

16. All figs in mt
Month Opening stock Procurement Sales Closing stock
Apr-15 1,609 1,235 1,450 1,394
May-15 1,394 1,136 1,237 1,293
Jun-15 1,293 1,506 1,324 1,475
Jul-15 1,475 1,517 1,509 1,483
Aug-15 1,483 1,675 1,911 1,247
Sep-15 1,247 1,503 1,435 1,315
Oct-15 1,315 1,430 1,261 1,484
Nov-15 1,484 1,231 1,570 1,145
Dec-15 1,145 1,573 1,406 1,312
Jan-16 1312 1460 1487 1285
Feb-16 1285 1426 1498 1213
Sales and Procurement data

17. CLASSIFICATION OF DEMAND
Procurement Sales
Month Imports Domestic Total Imports Domestic Total
Apr-15 551 684 1,235 614 836 1,450
May-15 320 816 1,136 505 732 1,237
Jun-15 829 677 1,506 508 816 1,324
Jul-15 377 1,140 1,517 581 928 1,509
Aug-15 423 1,252 1,675 638 1,273 1,911
Sep-15 442 1,061 1,503 383 1,052 1,435
Oct-15 762 668 1,430 492 769 1,261
Nov-15 366 865 1,231 673 897 1,570
Dec-15 671 902 1,573 573 833 1,406
Jan-16 507 953 1460 484 1003 1487
Feb-16 515 911 1426 513 985 1498
All figs in mt

18. 614
505 508
581
638
383
492
673
573
484
513
836
732
816
928
1,273
1,052
769
897
833
1003 985
0
200
400
600
800
1000
1200
1400
Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16
Imports
Domestic
Metrictonnes
Imported and Domestic quantity of raw material procurement

19. IMPORTS
DOMESTIC
37%
63%
Imported and Domestic quantity of raw material procurement

20. SALES V/S PROCUREMENT DATA
1,450
1,237
1,324
1,509
1,911
1,435
1,261
1,570
1,406
1487
1498
1,235
1,136
1,506
1,517
1,675
1,503
1,430
1,231
1,573
1460 1426
0
500
1,000
1,500
2,000
2,500
Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16
Sales
Procurement
Metrictonnes

21. Forecasting model
• Holt’s Model
• Winter’s Model
• Moving average method

22. Comparison of forecasting methods for Combined raw
materials
Forecasting
technique
MSE MAD MAPe TS
Moving average
method 60433 139 17 -1 to -5
Holt’s model
32882 132 9.04 -2 to 2
Winter’s model 33723 139
9.73 -3 to 1

23. Forecasting
technique
MSE MAD MAPe TS
Moving average
method 52059 152 28 -5 to 0
Holt’s model 21534 108 12 -2 to 3
Winter’s model 57015 192 23 1to 6
Comparison of forecasting methods for domestic raw
materials

24. Forecasting
technique
MSE MAD MAPe TS
Moving average
method 6378 55 21 -4 to 2
Holt’s model 6185 68 13 -2 to 0
Winter’s model 4465 63 12 -2 to 1
Comparison of forecasting methods for International
raw materials

25. Comparing the results of forecasting
• Forecasted value of combined raw materials
from Holt’s model- 1526 MT
• Forecasted value of domestic raw materials
from Holt’s model- 985 MT
• Forecasted value of International raw
materials from Winter’s model- 550 MT

26. Revising the replenishment policy
• The company procures raw materials once in a
month.
• In Proposed replenishment policy the
domestic raw material is procured twice in a
month.

27. • Total Quantity on hand : 1213 MT
• Imported raw materials : 515 MT
• Domestic Raw materials : 698 MT
MASTER PRODUCTION SCHEDULE – BEFORE WEEK 1

28. QTY ON HAND
(1213 MT)
1 2 3 4 5 6 7
FORECAST 60 60 60 60 60 60
PROJECTED ON
HAND
INVENTORY
(1763)
1703 1643 1583 1523 1463 1403
MPS QUANTITY 550
(Int)
MPS START 550
MASTER PRODUCTION SCHEDULE – WEEK 1

29. After Week 1
• Projected on hand inventory is 1403 MT.
• Imported raw material is 939 MT.
• Domestic raw material is 464 MT.

30. QTY ON HAND
(1403 MT)
1 2 3 4 5 6 7
FORECAST 60 60 60 60 60 60
PROJECTED ON
HAND
INVENTORY
(1403)
1343 1283 1223 1163 1103 1043
MPS QUANTITY
MPS START
MASTER PRODUCTION SCHEDULE – WEEK 2

31. After week 2
• Projected on hand inventory is 1043 MT.
• Imported raw materials is 813 MT.
• Domestic raw materials is 230 MT.

32. QTY ON HAND
(1043 MT)
1 2 3 4 5 6 7
FORECAST 60 60 60 60 60 60
PROJECTED ON
HAND
INVENTORY
(1043 MT)
983 923 863 1403 1343 1283
MPS QUANTITY 600
(Dom)
MPS START 600
(Dom)
MASTER PRODUCTION SCHEDULE – WEEK 3

33. After week 3
• Projected on hand inventory is 1283 MT.
• Imported raw material is 687 MT.
• Domestic raw material is 596 MT.

34. QTY ON
HAND
(1283 MT)
1 2 3 4 5 6 7 8
FORECAST 60 60 60 60 60 60 60
PROJECTED
ON HAND
INVENTORY
(1283 MT)
1223 1163 1103 1043 983 923 863
MPS
QUANTITY
MPS START
MASTER PRODUCTION SCHEDULE – WEEK 4

35. After Week 4
• Projected on hand inventory is 863 MT.
• Imported raw material is 540 MT.
• Domestic raw material is 323 MT.

36. Existing replenishment policy :
Quantity on hand : 1213 MT
Imported raw material : 550 MT
Domestic raw material : 800 MT
Total on hand inventory : 2563 MT
Suggested replenishment policy:
Quantity on hand : 1213 MT
Imported raw material : 550 MT
Domestic raw material : 600 MT ( after 15 days)
Total on hand inventory : 1763 MT
1613 MT(after 15 days)
Comparison between the existing replenishment policy
and the suggested replenishment policy
Production per day : 60 MT
Total number of days the excess raw material had to be stored outside the warehouse : 19 days
Total number of days the excess raw material had to be stored outside the warehouse : 7 days

37. On Implementing the proposed
replenishment policy

38. RAW MATERIAL TYPE
MONTH
OPENING
STOCK
DOMESTI
C/INTERN
ATIONAL
Apr-16 1063 669/393
May-16 663 185/478
Jun-16 743 139/604
Jul-16 843 93/750
Aug-16 243 47/196
MONTH
OPENING
STOCK
Apr-16 963
May-16 1043
Jun-16 1143
Jul-16 543
Aug-16 473
70/473 450 993 750 243
1/144 450 923 750 145
162/881 450 1493 750 743
116/1027 450 1593 750 843
DOMESTIC/INT DOMESTIC CAPACITY PRODUCTION CLOSING STOCK
197/766 450 1413 750 663
MID OF THE MONTH
CAPACITY PROCUREMENT RAW MATERIAL
450 500 1223 750 473
450 700 1893 750 1143
450 0 1293 750 543
0 650 1713 750 963
450 680 1793 750 1043
BEGINNING OF THE MONTH
PROCUREMENT RAW MATERIAL
CAPACITYDOMESTIC INTERNATIONAL PRODUCTION CLOSING STOCK

39. 1713
1793
1893
1293
1223
1413
1493
1593
993
923
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Apr-16 May-16 Jun-16 Jul-16 Aug-16
INVENTORY LEVEL
1st of the month
15th of the month

40. References
[1] Ajit Surajmal Kanodia, “Material Requirement Planning”, case study , May 1976.
[2] Matthew J Liberatore, “Using MRP and EOQ/safety stock for raw materials inventory control”, vol 9, no 2, February 1979.
[3] Gerhard Plenert, “Focusing material requirements planning (MRP) towards Performance”, Int.conf. Vol 119 , September1998.
[4] “U.S. Small Business Administration”, Inventory Control, 2000
[5] Dr Vassilis Moustakis, “Material requirement planning”, Vol 2 , January 2000.
[6] Marcel Baumgartner, “Use of Statistical Forecasting Methods to Improve Demand Planning”, 2004.
[7] Catherine D. Black “Optimal Inventory Control in Cardboard Box Producing Factories”, 2004.”
[8] Chantana Thongma , Ungul Laptaned, “Improving efficiency of material requirement planning and safety stock”, Research paper, 2nd Int.
conf. May 18-20, 2007.
[9] Dr. Ravi Mahendra Gor, “Forecasting Techniques”, 2008.
[10] Mr. J. O. Kyei, Mr. Samuel Boateng, Mr. Peter Gyimah, “Principles And Techniques Of Managing Inventory”, 2008.
[11] Sevenpri Candra and Haryadi Sarjono, “Forecasting For Inventory Control”, School of Business Management, Bina Nusantara University,
Jakarta, 2008.
[12] Ralph D. Snyder, J. Keith Ord, Adrian Beaumont, “Forecasting the Intermittent Demand for Slow-Moving Items”, 2010.
[13] Professor Guillermo Gallego, “Production Management”, Vol 11, 2010.
[14] “Demand Forecasting, Resource planning and procurement stratigies”, Pavel Bondarev, 2012.
[15] Sunil Chopra, Peter Meindl, D. V. Kalra, “Supply Chain Management”, Fifth edition, 2013.

41. THANKYOU