Optimizing inventory management for Multi-product production

Abstract

The article addresses the problem of inventory management optimization under conditions of multi-item, one-off production, which is characteristic of enterprises in the electrical switchgear industry. A distinctive feature of this type of production is the individual configuration of each assembly unit, which requires a wide and consistently replenished range of components. Special attention is paid to the need to maintain a balance between supply reliability, minimization of inventory levels, and reduction of total costs associated with procurement, storage, and component shortages. It is noted that the methodological basis of the study includes statistical methods of demand analysis (calculation of the mean value and variability), the economic order quantity (EOQ) model, as well as ABC and XYZ classification of inventory items. Based on data from an electrical switchgear manufacturing enterprise on the actual consumption of five groups of components-enclosures, circuit breakers, contactors, terminal blocks, and controllers-EOQ values, reorder points, and safety stock levels were calculated for each component, taking lead time into account. An ABC analysis was conducted to identify key components that make the main contribution to total costs, and an XYZ analysis was performed to reflect demand predictability. Combining these two approaches made it possible to classify components using the ABC/XYZ matrix and to develop individualized management strategies: for each category, replenishment algorithms and recommendations on safety stock levels, order frequency, and rational allocation of warehouse resources were formulated. The practical significance of the work is highlighted: the proposed inventory management system makes it possible to reduce the enterprise’s total costs by 23%, improve the stability of material and technical supply, and reduce the risk of production stoppages due to component shortages.