Inventory Reduction Decrease in a

Retail Company
GARCIA CHRISTOPHER, MEDINA MELANIE, VILLACRES CESAR
INDUSTRIAL ENGINEERING
FIMCP
JANUARY 2021
PROJECT TEAM

AUDIT CHIEF

ANALYST 1 PROJECT ADVISOR: 

PhD. KLEBER BARCIA

ANALYST 2

PROJECT LEADER: PROJECT LEADER

IMPROVEMENT CHRISTOPHER GARCIA
MELANIE MEDINA
GROUP

PROJECT LEADER:
CESAR VILLACRES
RETAIL COMPANY
Products
• Home’s product: mirrors, ceramic vases, various ornaments, crystals and any
item used by the home, imported or local.

Activities
• Reception, storage, dispatch.

Location 
• Guayaquil

Supply Chain
• Distribution center

Customers
• Stores
• Retailers 
ORIGINAL SITUATION
VOICE OF CUSTOMER
INADEQUATE THE CONTENT OF
PRODUCT THE
PROTECTION IN INCORRECT STOW PACKAGES ARE
DIFFERENT PARTS NOT CHECKED TO
OF THE PROCESS. SAVE TIME

THE
THE PACKAGES STEVEDORES DON'
LACK OF STORAGE
ARE NOT THE T KNOW
SPACE
ORIGINALS THE PACKAGES
CONTENT

THE PRODUCTS DO
NOT HAVE THE
FRAGILE LABEL
 CTQ

GOOD CUSTOMER
SERVICE INCREASE PROFITS NEEDS

DELIVERY
QUALITY
SPEED PRICE DRIVERS

COST PER
PERCENTAGE
OF DAMAGE
LOWER COST
PER MERMA
SPEED TEAM WORK INVENTARY CTQ´S

REDUCTION
 RESPONSE VARIABLE

• Y = Percentage of lost sales

 PROBLEM STATEMENT

TIME SERIES OF THE LOSS / SALES RELATIONSHIP PERIOD YEAR 2008

 AVERAGE PERCENTAJE OF OPERATING LOSS IN YEAR 2008: 4,43%
 BENCHMARK: 1,6%
 GAP: 2,27%
 LOSS OF SALE DUE TO DAMAGED ITEM: $1,003,853
 3W+2H
• EXCESSIVE INVENTORY REDUCTION DUE TO DAMAGED PRODUCTS
WHAT?

• IN THE RETAIL WAREHOUSES

WHERE?

• SINCE 2018
WHEN?

• THERE IS AN AVERAGE 4,43% OF INVENTORY REDUCTION

HOW REGARDING SALES
MUCH?

• A STUDY CARRIED OUT BY THE CHILEAN CHAMBER OF COMMERCE

HOW DO I ESTABLISHES THAT THE LOWEST INVENTARY REDUCTION INDICATOR IS 1.6%
KNOW?
PROBLEM STATEMENT

"EXCESSIVE INVENTORY REDUCTION DUE

TO DAMAGED PRODUCTS IN THE RETAIL
WAREHOUSES SINCE 2018. THE
COMPANY PRESENTS IN AVERAGE 4,43%
PERCENT OF INVENTORY REDUCTION .
HOWEVER, BASED ON A STUDY CARRIED
OUT BY THE CHILEAN CHAMBER OF
COMMERCE IT SHOULD BE NEAR 1.6%"
 SIPOC
SUPPLIER INPUT PROCESS OUTPUT CLIENT

Import Merchandise Arranged 

Containers products on Warehouse
Department reception
shelves

Order Distribution
Store Order Warehouse
processing order

Data Distribution  Packed

Picking Dispatch office
digitizer order items

Packed Stacked
Dispatch office Transportation Store
items merchandise
 CONSTRAINTS

LACK OF
PICKING
EXPERIENCE

USE MINIMUM
TIME
RESOURCES

QUICK
MANEUVER

CONFIDENTIALITY
WITH THE
INFORMATION
 FINANCIAL ANALYSIS
SCENARIOS OBJECTIVE CAPITAL RECOVERY

70% 2.24% MERMA $44,245,86

50% 3,02% MERMA $44,168,02

30% 3,58% MERMA $8,522,71

 PROJECT OBJECTIVES

SMART OBJECTIVE
DECREASE THE INVENTORY REDUCTION FROM 4.43% TO 3.02% IN A 4
MONTHS PERIOD. IN ORDER TO RECOVER A CAPITAL OF $44,246
WHICH REPRESENTS THE LOST SALES DUE TO DAMAGED PRODUCTS.
WORK PLAN
 PROJECT CHAPTER
PROJECT CHAPTER
Project Title Inventary reduction decrease in a retail company
Project Start Date 14/10/2020 Project End Date 20/1/2021 Project Advisor PhD. Kleber Barcia

CTQ Tree
Percentage of Damage
Cost per Inventary reduction
Project Scope Deliverables
Decrease the inventary reduction .
Risks and Issues Assumptions/Dependencies

Triple Bottom Line

Economic Impact Social Impact

Increase of the benefit

Reduce expenses Best relationship with  customers
Environmental Impact
Improving logistics
Reduce ecological footprint

Project Team Approval/Review Commitee

Project Leader Christopher García Advisor PhD. Kleber Barcia

Process Analyst Melanie Medina

Project Manager
Process Analyst Cesar Villacres   
 M

Others O

ITEM
TYPES IN
C THE W
RETAIL
COMPANY

G Y

L
STRATIFICATION BY ITEM TYPE
PARETO – FIRST LEVEL

"M", "O" and

"W" represent
aprox. 80%
STRATIFICATION BY COMPLAINTS TYPE
PARETO – SECOND LEVEL

Broken
represents
aprox. 80%
STRATIFICATION BY BROKEN PRODUCTS
PARETO – THIRD LEVEL

"M"
represents
aprox. 80%
FOCUSED PROBLEM STATEMENT

9.5%  OF INVENTORY REDUCTION DUE TO

DAMAGED "M“, “W” AND “O”
PRODUCTS IN THE RETAIL
WAREHOUSES SINCE 2018. HOWEVER,
BASED ON A STUDY CARRIED OUT BY THE
CHILEAN CHAMBER OF COMMERCE IT
SHOULD BE NEAR 1.6%"
FlowChart
 DATA COLLECTION PLAN

What to measure? How to measure?

Sampling

Variable Meaning Measure unit Type of Data collection method

information

Quantitative – referral guide, GEMBA,

X1 Damaged M items Percentage Database 2019
Discreet Company Software

Quantitative – referral guide, GEMBA,

X2 Damaged O items Percentage Discreet Company Software Database 2019

X3 Damaged W items Percentage Quantitative – referral guide, GEMBA, Database 2019

Discreet Company Software
Monthly percentage of damaged items in 2018

Database 2018
DATA VALIDATION
NP CONTROL CHART

The process is
out of control,
it is unstable.
CAPACITY ANALYSIS

Cp < 1. 
The process
is not capable.
 Workers don't set products Products aren't packed
in the truck properly. or stored properly in the
Drivers do not take warehouses. 
precautions. There isn't enough
Fragile products don't have storage space.
identification.
Ideas proposed by company
collaborators
Badly stowed The products are
They do not carry out mistreated PEOPLE INVOLVED IN
entrance inspection at customs and BRAINDSTORMING:
arrive damaged. Warehouse workers
Sell Departament
Do not have proper stairs to store The company Store workers
has poor Project Team
Request few units for the main
warehouse quality control
of its suppliers.
 ISHIKAWA DIAGRAM
Methods Customer
WorkForce • Badly stowed
• Request few units • Customer
• They do not notice • No entry checks manipulation
• Lack of concern • It breaks when lining
• Difficulty to store
• Seller does not • Stevedore doesn't know
review item what the package contains Damaged
• Badly stored
• Products are • Lack of tools • CELLAR ítems
very fragile. • Products
Poorly packed
• Fragile products • Change of are damaged
Lack of storage space
don't have on the way.
enviroment
identification. • TRANSPORT
• Customs
Materials Heavy boxes with fragiles
mistreatment
Environment Provider No driver caution
They don't know what it contains
CAUSE AND EFFECT MATRIX
CAUSE AND EFFECT MATRIX
INPUT VARIABLES "X" OUTPUT VARIABLE "Y" Involved in the process:
Methods • Audit chief
1 badly stowed​ • Winemakers (3)
2 request few units​ • Warehouse receivers
3 no entry cheks​ Scoring Format
4 it breaks when lining​
• Logarithmic scale
5 difficulty to store​
longshoreman dos not what it
6 contains​
Provider
7 products arrived damaged​
8 customs mistreatment​
9 poorly packed​
10 lack of storage space​
11 heavy boxes with fragiles in the car​
12 no driver caution​
13 driver does not know what it contains​
 CAUSE AND EFFECT MATRIX

CAUSE AND EFFECT MATRIX

INPUT VARIABLES "X" OUTPUT VARIABLE "Y"
Workforce
14 they do not notice​
15 lack of concern​
16 seller does not review item​
Customer
17 customer manipulation​
Materials
18 very fragiles
19 lack of identification of fragiles​
Environment
20 lack of tools​
21 change of environment​
 CAUSE AND EFFECT MATRIX

OUTPUT VARIABLE "Y"

INPUT VARIABLES "X" Average Percentage of Lost Sales
PERSON 1 PERSON 2 PERSON 3 PERSON 4 PERSON 5 TOTAL
Methods
1 badly stowed 3 9 9 9 9 9
2 request few units 9 3 1 1 1 1
3 no entry cheks 9 6 6 6 6 6
4 it breaks when lining 9 3 6 6 6 6
5 difficulty to store  6 6 3 1 9 6
6 longshoreman dos not what it contains 9  3 1 9 9 9
Provider
7 products arrived damaged 9  9 6 6 9 9
8 customs mistreatment  9 6 3 9 9 9
9 poorly packed 9 9 9 6 9 9
10 lack of sotrage space  3 6 3 6 9 6
11 heavy boxes with fragiles in the car  6 6 6 6 6 6
12 no driver caution  6 6 9 6 3 6
13 driver does not knows what it contains  9 3 6 9 9 9
WorkForce 
14 they do not notice 1  3 9 6 6 6
15 lack of concern  6 6 6 6 6 6
16 seller does not review item  6 3 3 9 3 3
Customer 
17 customer manipulation 9 9 3 6 9 9
Materials
18 very fragiles  1 0 1 0 1 1
19 lack of identification of fragiles 9 9 6 9 9 9
Environment
20 lack of tools 6  3 3 1 1 3
21 change of environment  1 1 0 0 0 0
 Products are Products
Lack of Poorly
badly stored in arrives
fragile Identification packed
the warehouses damaged

Manipulation
Impact
Stevedores don't
Customer know the content Customs mistreatment
manipulation of the package.

Drivers don't Workers do not

take carry out entrance
precautions inspection​

Effort
 POTENCIAL CAUSES

Lack of
fragile Identificatio Poorly packed Manipulation 
n
VERIFICATION PLAN
X´s Potential Causes X´s
Lack of identification
1 of Fragiles
2 Poorly Packed
3 Manipulation
Theory about Impact
The lack of fragility labels increases the
number of defective products. That is,
the greater the number of products
without a label, the greater the loss.
Poorly packed prodcuts increases
the number of defective products. That
is, the greater the number of poorly
packed products, the greater the loss.
Bad handling increases the number of
defective products. That is, the greater
the mishandling, the greater the loss.
DataType Analysis Method
Box plot comparing “W" items shipped to two
different warehouses. To one they arrive with an
Quantitative-Discreet indication and to the other they arrive without
indications of treatment in the packaging and
transfer, descriptive statistics, T Test.
Box plot comparing "O" items shipped to two
different warehouses. To one they arrive with an
Quantitative-Discreet
indication and to the other they arrive without
indications of treatment in the packaging and
transfer, descriptive statistics. T Test.
Box plot comparing "M" items shipped to two
Quantitative-Discreet different warehouses. To one they arrive with an
indication and to the other they arrive without
indications of treatment in the packaging and
transfer, descriptive statistics, T Test.
FACTOR VERIFICATION
If the means are equal, then the
Indicated Treatment Factor of
the articles has no influence on
the breakage of the articles.

Ho: Identifying as fragile has no

influence over damaged ítems.

H1: Identifying as fragile has

influence over damaged ítems.
DEFECTS MONITORING OF ARTICLES "W"

CONCLUSION: The factor Identifying as Fragile in the boxes has P value < 0,05 : “Reject Ho”
influence on the percentage of damage in the articles.
DEFECTS MONITORING OF ARTICLES "W"

P value > 0,05 : “Do not Reject Ho”

CONCLUSION: The factor Manipulation indicated in the boxes has not influence
on the percentage of damage in the articles.
DEFECTS MONITORING OF ARTICLES "W"

P value < 0,05 : “Reject Ho”

CONCLUSION: The factor Poorly Packed (packaging indications) has influence

on the percentage of damage in the articles under test O.
VERIFICATION PLAN
Potential Causes
X´s X´s Theory about Impact
The lack of fragility labels
Lack of increases the number of
defective products. That
1 identification is, the greater the number of
of Fragiles products without a label, the
greater the loss.
Poorly packed prodcuts
increases the number of
defective products.
2 Poorly Packed That is, the greater the
number of
poorly packed products, the
greater the loss.
Bad handling increases the
number of defective products.
3 Manipulation That is, the greater the
mishandling, the greater the
loss.
DataType Analysis Method Status Conclusions
Box plot comparing “W" items shipped
to two different warehouses. To one
Quantitative- they arrive with an indication and to the
Discreet other they arrive without indications of Verified  Significative
treatment in the packaging and transfer,
descriptive statistics, T Test.
Box plot comparing "O" items shipped to
Quantitative- two different warehouses. To one they
arrive with an indication and to the
Discreet
other they arrive without indications of Verified Significative 
treatment in the packaging and transfer,
descriptive statistics. T Test.
Box plot comparing "M" items shipped
Quantitative- to two different warehouses. To one
they arrive with an indication and to the
Discreet
other they arrive without indications of Verified No significative
treatment in the packaging and transfer,
descriptive statistics, T Test.
 No influence

Packing and Manipulation

Lack of
moving Identification
of Fragiles
treatment
process.
Poorly
Packed

Y: Average Percentage
of Lost Sales
 5 WHY´S
What ? Why ? - 1 Why ? - 2 Why ? - 3 ROOT CAUSES
The boxes are worn The boxes are reused The boxes are reused
Lack of identifica
tion of Fragiles Not all articles are Products do not Too many
Too many different items
coded have defined families different items

Stevedors put heavy Stevedors have no Package do not

knowledge of the Package do
packages on fragile have
products contents of the identification. not have identification.
package

Poorly Packed No Tracking of Packing Record

Stevedors do not follow
the packaging rules. Stevedors priority is time.

Stevedors do not count with the

proper tools.
ROOT CAUSES

Reuse of Lack of Items  Time is Packages

boxes Tracking without priority without
Packing codification identifiactio
Record n
PROPOSALS FOR SOLUTIONS
Root causes Solutions

Reuse of boxes
Implement an adjustable
Items without static shelf for the
codification storage of products

Lack of tracking
packaging records
5S 
Methodology
Time is priority
Buy machinery for
Packages without a stevedoring
identification
Adjustable static she
lf
It allows total accessibility to any
product.

There is no congestion. So the

risk of damage to the product is
reduced.

Allows you to store a large

number of SKUs
 5S Implementation

SEIRI SEITON SEISO SEIKETSU SHITSUKE

• Carry out a • Add an • Clean the • Standardize • Train
survey on the identification products the stowage employees
packages that to reused loading and process • Monitor the
are no longer packaging unloading • Establish a use of
in good areas useful life time packaging
condition and for packaging • Implement a
discard them. • Keep a record checklist in the
of the use of stowage
each package process
ECONOMIC ANALYSIS
Implement an
adjustable static shelf Buy machinery for
5s Implementation
for the storage of stevedoring
products
REQUIRED
MATERIAL/EQUIPMENT $900 - $1000
/STAFF
INSTALLATION $2500 - -
MAINTENANCE $1000 - $1000
CAPACITATION $1000 $1000 $800
TOTAL $5400 $1000 $2800
IMPACT-EFFORT ANALYSIS

Best
5S  Solution
Methodology

IMPACT
Implement an adjustable
static shelf for the
storage of products

Buy machinery for

stevedoring

EFFORT
ROOT CAUSES WHAT? WHY? WHERE? WHO? HOW? COST WHEN? STATE

Because if we Carrying out a

prevent the boxes
from being survey on the
REUSE OF packages that are
overused, we can
BOXES prevent the no longer in good
condition and
products from
being damaged discard them.
PROJECT
5s methodology WAREHOUSE LEADERS $1000 JAN PLANNING
implementation 2021

Workers need to
TOO MANY have knowledge Classifying
DIFFERENTS products based on
ITEMS about the content the type of
of the products
WITHOUT for their correct packaging that
CODIFICATION must be made
shipment
ROOT CAUSES WHAT? WHY? WHERE? WHO? HOW? COST WHEN? STATE
Because if we know
how many times
LACK OF each of the Monitor the use 
TRACKING packages have been of packaging
PACKAGING used, we can
RECORDS discard them when
they reach the
established limit
Because by
5s methodology standardizing the Standarding the
TIME IS PROJECT stowage process. JAN
PRIORITY implementation processes we WAREHOUSE LEADERS Trainning employ $1000 2021 PLANNING
decrease the cycle
ees
time
Because by
identifying the
PACKAGES packages we can Adding an identifi
WITHOUT A keep a record of cation to reused 
their use and thus packaging
IDENTIFICATION
be able to discard it
when it reaches its
useful life.
SCHEDULE IMPLEMENTATION
PLAN
SCHEDULE IMPLEMENTATION
PLAN
INPUT VARIABLES
“M” DEMAND “O” DEMAND

“W” DEMAND

DATA OBTAINED BY THE COMPANY'S DATABASE IN EXCEL

SIMULATION MODEL
VERIFICATION
FLOWCHART MODEL

VERIFIED BY: ING. JOSHIRO AIZPRUA

HIPOTHESIS TESTING
The values of 5 replicas made in Flexsim are Considering α=0,05
taken for each report from warehouse report.
The output variable is represented by 70% of Ho: E(Y) = 0,0443
critical articles H1: E(Y) ≠ 0,0443

𝑡  𝛼 =𝑡 0.025,4 =2,78
, 𝑛 −1
2
CRITICAL ARTICLES > 70%
ACCUMULATE
  𝑡 = 𝑌´ − 𝜇 = 0,0422 −0,0443 =0,18
R
1
2
M
27%
25%
O
26%
24%
W
20%
18%
D
73%
67%
Y
0,04178165
0,03834755
|
| 0| 𝑠 / 𝑅
√ ||0,0249 / √ 5 |
 𝑡 0< 𝑡 𝛼 =0,18 <2,78
3 28% 26,60% 18,60% 73% 0,04189612
4 30% 29,20% 19% 78% 0,04475788 2
5 29,50% 25% 23% 78% 0,04435724
MEDIA 0,04222809
DESV. 0,00256424
Do not reject Ho
VALIDATION
POWER TEST
Operating Characteristic Curves for The Two-Sided
t Test for Different Values of Sample Size n

  𝜀 0,002
𝛿= = =0,84
𝑆 0,0025

  , then R = 20

To guarantee a Power of the Test greater or

equal tan 0.95, 20 Replications of the model are
required.
 IMPROVEMENTS
5S Implementation

SEIRI SEITON SEISO SEIKETSU SHITSUKE

Carry out a survey on the Add an identification to Clean the products loading Standardize the stowage Train employees
packages that are no reused packaging and unloading areas process Monitor the use of
longer in good condition Establish a useful life time packaging
and discard them. for packaging Implement a checklist in
Keep a record of the use the stowage process
of each package
 IMPLEMENTATION
STAGE 0: PLANNING AND PREPARATION 5s Promotion Organigram

Photograph of the site 

STAGE 1: SEIRI IMPLEMENTATION
Selection Criteria
STAGE 2: SEITON IMPLEMENTATION
STAGE 3: SEISO IMPLEMENTATION
Checking of warehouse facilities
Cleaning maintenance methods Check-Clean Sheet
The state of the cellar
Bad Regular  Good
after cleaning is? 

Front
Box area
Bags
Equipments
Floors
Shelves
Stow tools
Pallets
 STAGE 3: SEISO IMPLEMENTATION STEP 3. CLEANING MANUAL

STEP 4. CLEANING ELEMENTS: IN PLACE

STEP 1. CLEANING DAY: SURFACE CLEANING

STEP 2. MAINTENANCE PLANNING: STEP 5: CLEANING AWARENESS

CLEANING MANAGER BY WORK AREA
STAGE 4: SEIKETSU IMPLEMENTATION
STAGE 5: SHITSUKE IMPLEMENTATION 

Follow the standards every day

Carry out the actions planned after audits

Find ways to make it easier to fullill the 5's

All personnel under our responsability are trained

to meet the standards
SIMULATION MODEL
BONFERRONI METHOD
R CURRENT SYSTEM Y1 Ɵ1-Ɵ2
1 0,0418 0,0225 0,0193
R 20 𝑫𝒊 − 𝒕 𝜶 𝒔𝒆 ( 𝑫𝒊 ) ≤ 𝜽 𝟏− 𝜽 𝒊 ≤ 𝑫𝒊+𝒕 𝜶 𝒔𝒆 ( 𝑫𝒊 )
α 0,05
2 0,0383 0,0100 0,0283   𝟐
,𝑹−𝟏
𝟐
, 𝑹 −𝟏

3 0,0419 0,0230 0,0189

C 1
4 0,0448 0,0160 0,0288
αi/C 0,05
5 0,0444 0,0170 0,0274  0,0158161 0,02515594
6 0,0448 0,023 0,0218
7 0,0450 0,0278 0,0172
t(αi/2,R-1) = t(0.025,19) = 2,09 8 0,0389 0,03 0,0089
9 0,0492 0,0162 0,0330
10 0,0446 0,0154 0,0292
11 0,0440 0,035 0,0090
12 0,0448 0,0291 0,0157  
Analysis:
13 0,052 0,021 0,0310 • If C.I. is to the right of 0.
14 0,0423 0,0497 -0,0074
15 0,05 0,0399 0,0101 There is strong evidence that
16 0,0405 0,0221 0,0184 Ho: > 0 ).
17 0,052 0,0235 0,0285
18 0,0493 0,0186 0,0307
19 0,0478 0,0298 0,018 Y Improved is less than Y Current.
20 0,0447 0,0217 0,023
Di 0,0205
S 0,00999259
 S² 9,9852E-05
S/raiz(R) s.e. 0,00223441
 OUTPUT VARIABLE
BEFORE AFTER

MERMA TIME SERIES JANUARY 6,28% 3,03%

10.00%
FEBRUARY 3,87% 2%
9.00% 8.91%
8.00% 8.18%
MARCH 8,18% 3,51%
7.00%
6.28%
6.00% 6.13% APRIL 6,13% 1,21%
5.00%
4.00% 4.21% 4.10% MAY 0,59% 0,64%
3.87% 3.73% 4%
4%
3.00%3% 3% 3%
3%
2.23% 2.46% 2.51%
2% JUNE 4,21% 3,11%
2.00% 2% 2%
2%
1.00% 1%
1%
0.59% JULY 2,23% 2,52%
0.00%
Y Y H L AY NE LY T R R R R
AR AR RC RI JU US BE BE BE BE AUGUST 4,10% 1,61%
U U A AP M JU G M O EM EM
JA
N BR M AU TE CT V C
FE SE
P O
NO D E SEPTEMBER 2,46% 2,07%

BEFORE AFTER
OCTOBER 3,73% 2,75%

NOVEMBER 8,91% 3,56%

BEFORE: 4,43 % MERMA DECEMBER 2,51% 2,44%
AFTER: 2,37% MERMA
NORMALLY TEST
Ho: The data follows a Normal Distribution
H1: The data does not follow a Normal Distribution

P Value > 0,05

Does not Reject Ho
T TEST OF TWO SAMPLES

Ho: The actual percentage of Lost Sales in the Retail Company is equal to the
percentage of Lost Sales in the Retail Company of the improved process.
P Value < 0,05
Ho is rejected
H1: The actual percentage of Lost Sales in the Retail Company is not equal to
the percentage of Lost Sales in the Retail Company of the improved process.
CAPACITY ANALYSIS
Before After
ECONOMIC ANALYSIS

50%
APPROXIMATE
SAVING %
BEFORE AFTER
M $ 218.241 $ 109.121
O $ 212.701 $ 106.351
W $ 156.644 $ 78.322
SUM $ 587.586 $ 293.793

OTHERS $ 416.267 $ 208.134

LOST SALES $1.003.853 $ 501.927

TRIPLE BOTTON LINE METRICS

SOCIAL ENVIRONMENTAL
ECONOMIC
Best relationship with Reduce its ecological
Recovery of capital and
the customers foot print as much as
sales
Less insecurity in possible
workers Recycling Program
RAW CAUSES CONTROL PLAN
Process: Verification of the efficiency of the 5S Implementation 

Project: Inventory reduction decrease in a Retail Company Project Leader: Garcia, Medina, Villacres

Process Owner: Chief of warehouse Date: 21/01/2021

What How Who Freq. Deliverables

Carry out a survey on the Take inventory of the Updated Information in a

packages every day in order to spreadsheet with the current
packgages that are no longer in do a quality control to discard Warehouse Staff Daily number of packages in good
good conditions. packages in bad conditions conditions.

Verify the fulfillment of the

procedures for loading and erify the correct use
unloading  products at the of materials neccesary for Warehouse chief Daily Internal Procedures
warehouses. this procedure. 
I. CONTEXT Stevedors put Stevedors have
Package do
heavy packages no knowledge of Package do not have identifi
not have identific
on the contents of ation.​ cation.​
fragile products​ the package​

Poorly Packed​ No
Stevedors do Tracking of Packing Record​
not follow the
​ ​ Stevedors priority is time.​
packaging rules.​
​ Stevedors do not count with
the proper tools.​

II. CURRENT SITUATION V. PROTECTIVE ACTIONS

What How Who

Take inventory of the packages every day in order
Carry out a survey on the packgages that are no to do a quality control to discard packages in bad Warehouse Staff
longer in good conditions. conditions

Verify the fulfillment of the procedures for loading Verify the correct use of materials neccesary for
Warehouse chief
and unloading  products at the warehouses. this procedure. 

III. OBJECTIVES AND GOALS VI. CONTROL

REDUCE 50% OF DAMAGED ITEMS “M”, “O” AND “W” IN THE WAREHOUSE
MERCHANDISE OF THE 2020 PERIOD TO CLOSE TO 1.6% BY THE YEAR 2021.

IV. ANALYSIS
What ?​​ Why ? - 1​​ Why ? - 2​​ Why ? - 3​​ ROOT CAUSES​​

The boxes The boxes are  The boxes are re

​
are worn​​ reused​​ used​​
Lack of ide
ntification  Products
of Fragiles​​ Not all do not have d Too many differe Too
articles are co many different
efined familie nt items​​
ded​​ items​​
s​​
REACTIO
N PLAN
 CONCLUSIONS AND
RECOMMENDATIONS
CONCLUSIONS

• The simulated process in this investigation depends clearly on the demand and how it is handled, since
the times of the procedures such as reception, packaging, etc. that occur within the winery, do not
generate any change in the response variable.
• The implementation of the 5S generates an improvement not only in the critical articles that generate
more than 70% of the percentage of general loss, but in all the other articles with less impact on the
results, but that in the end represents a reduction in costs by lost sales.
• The implementation of the 5S achieves more comfortable and productive work areas for employees,
which is reflected in an increase in the level of service for customers.

RECOMMENDATION

• As it is a non-terminal process, it must be taken into account that it is necessary to consider a point
where the process becomes stable to collect the data.
• A much more efficient solution proposal would be to manage an inventory policy to better manage
demand.
• Continue with the continuous improvement process because there are always aspects to improve.
THANK
YOU