(Luận văn) improving the inventory management activities in phat dat joint stock company

INTRODUCTION Context of the thesis In the global economy, in order to develop, every business must ensure the autonomy in production and profitable business activities Businesses must pay attention to all stages in order to best meet the needs of business operations and improve the quality, lower production costs so that it is able to ensure competitiveness for the products For manufacturing enterprises, warehousing activities, especially warehouse and inventory management, are particularly important If these lu activities are done well, businesses will reduce a large amount of costs an including the cost of storage of raw materials, the cost of renting space, At n va the same time, good warehouse management will ensure adequate supply of raw to gh tn materials for production, avoiding material shortages leading to production bottlenecks or shortages of market supply products ie p The management of warehouse and inventory has a strong impact on the nl w performance of business but has not been given adequate attention, especially in d oa small businesses Therefore, I decided to spend my internship at Phat Dat's an lu warehousing department to be able to learn more about inventory management nf va activities Eventually, I chose the theme: “Improving the inventory management lm ul activities in Phat Dat Joint Stock Company” for my thesis In addition, the thesis will clarify the pros and cons of inventory and inventory management z at nh oi activities at Phat Dat Joint Stock Company (JSC) and provide solutions to overcome the negative aspects l gm @ 2.1 Subject of research z Subject and purpose of research The subject of the thesis is the inventory management activities at Phat m co Dat JSC an Lu n va ac th si 2.2 Purpose of research The purpose of the thesis is to give recommendations and solutions to improve the inventory management activities at Phat Dat JSC 2.3 Missions of research The thesis needs to focus on main missions as follow: - Summarizing basic theoretical and concrete knowledge about the inventory and inventory management - Analyzing the inventory management activities at Phat Dat JSC - Giving solutions to improve the inventory management activities at Phat lu Dat JSC an Scale of research va n The thesis analyse the activities realated to the invnetory management of to gh tn Phat Dat JSC These activities mainly take place in the warehousing and manufacturing department of the company In addition, the data is calculated ie p between 2017 and 2019 nl w Methodology d oa 4.1 Data collection an lu The thesis is made mainly based on the collection of secondary data, in lm ul follows: nf va addition to collecting primary data These two data sources are collected as - Secondary data: Analysis data is collected through accounting reports z at nh oi and business statements of the company Other sources are newspapers, magazines, statistic offices, and websites, etc z Secondary data is plentiful, varied, and comes from different sources @ easily and quickly co l gm Therefore, researchers must be familiar with the sources to exploit information m Secondary data is easy to collect and less time-consuming This type of an Lu data is an important document in research as well as other academic papers n va ac th si However, secondary data is not enough when it comes to research because of the incompletetion - Primary data: the data is collected by the writer while working at the company, based on the observation and recording process during the internship The data is considered simple and incompete.However, this is also a helpful source of information so that the writer can make conclution about the subject of research 4.2 Data processing Statistical, descriptive, and synthesized methods of data: using statistical lu tools to collect data and then analyze, compare, evaluate, and draw conclusions an about the causes of the change n va 4.3 Case study gh tn to Disposition ie p The thesis includes parts: nl w - Chapter I: Literature review about inventory and inventory management an lu the company d oa - Chapter II: Phat Dat JSC and the warehousing management activities of nf va - Chapter III: Recommendations and solutions z at nh oi lm ul z m co l gm @ an Lu n va ac th si CHAPTER 1: LITERATURE REVIEW ABOUT INVENTORY AND INVENTORY MANAGEMENT 1.1 Overview about inventory 1.1.1 Inventory definition Inventory is the array of finished goods or goods used in the production held by a company Inventory is classified as a current asset on a company's balance sheet, and it serves as a buffer between manufacturing and order fulfillment (Kenton, 2019) Inventory is either goods or materials or both of these that the company lu holds for different purposes It plays an important role in the business and other an activities related Inventory appears in both manufacture and sevices For n va manufacture, inventory refers to all work that has occurred – raw materials, to gh tn partially finished products, finished products prior to sale and departure from the manufacturing system In the context of services, inventory refers to all ie p work done prior to sale, including partially process information (Wikipedia: nl w Inventory, n.d.) d oa There are some main reasons for keeping an inventory which makes an lu stook important to the business: nf va - Time: the time lag appears at different stages of the supply chain It is lm ul also called by a familiar name – lead time To maintain the production and shorten the ordering time, the company needs to store inventory and calculate z at nh oi other factors related - Seasonal demand: the consumption of goods depends on periods of the z year Special times such as the new year or vacations can affect customer’s l gm @ psychology and demand - Economies of scale: the cost advantages could be obtained more when m co the company store inventory specifically activities in bulk an Lu - Uncertainty: the instability in supply, demand, etc is the reason to hold n va inventory to adapt to the production of the company ac th si In short, inventory is needed in every sector of the economy Due to its importance, inventory has been studied for a long time and the theoretical framework about it is quite adequate Aspects such as classification of inventory and how to store it efficiently were presented throughout the years 1.1.2 Functions of inventory There are some main functions as follow: - Improving the service quality: inventory helps reduce the waiting time of customers Also, defective products can be converted easily if there is any request from the buyer lu - Reducing logistics cost: the costs for shipment, warehouses could be an reduced thanks to suitable inventory va n - Adapting unexpected orders: having enough inventory will offset the to gh tn limited production capacity when there are unexpected orders with large quantities ie p - Saving cost for business: the company can preserve more inventory at d oa the price rises nl w low price periods to cut down buying cost as well as to use for business when an lu On the other hand, different industries would hold inventory for different nf va purposes, which makes this asset become varied functional lm ul 1.1.3 Classification of inventory Inventories are diversified and different industries have seperated ways to z at nh oi classify Therefore, to manage inventory well, we need to classify inventory by some specific methods: z Classify inventory based on purpose and uses @ l gm Inventory in the business will be divided into: - Inventory for production: material, semi-produced goods, etc co m - Inventory for sales: fully-made products and other goods for sales an Lu This method helps managers make purchasing estimate as well as n va reserving plans for inventory and other business activities ac th si Classify inventory based on source of formation - Purchased inventory includes internal purchased inventories are bought from suppliers inside the system of the business (these suppliers and the company usually share the capital or have the same owner) On the other hand, external purchased inventories would contrast to internal purchased ones - Self-produced inventory: stock produced and store by the company itself - Inventory from other sources: inventories as gifts or venture, etc It is easier for managers to calculated cost of good sold in this method so the firm could evaluate the stable level of inventories’ formation lu Classify inventory based on Standard no.2 an The standard was Issued and publicized together with Decision No n va 149/2001/QD-BTC of December 31, 2001 of the Minister of Finance In this to gh tn standard, inventory is divided into: - Goods purchased for sale: goods in stock, purchased goods being ie p transported en route, goods sent for sale, goods sent for processing; nl w - Finished products in stock and finished products sent for sale; d oa - Unfinished products: uncompleted products and completed products not an lu yet going through the procedures for being put into stores of finished products; nf va - Raw materials, materials, tools and instruments in stock, sent for lm ul processing, and already purchased but being transported en route; - Costs of unfinished services (VAS - Inventories, 2001) z at nh oi This document is the standard for business to determine the types of inventory and how to make the balance sheet as well as the financial statements z In short, every method has a specific meaning to business activities @ choose their ways of classifying inventory m co l gm Depends on the situation and the requests of the company, the managers can an Lu n va ac th si 1.2 Inventory management 1.2.1 Definition There are many difinitions about inventory management since this is an important party of supply chain These difinitions could be all summarized to the following words: Inventory management is the supervision of non-capitalized assets, or inventory, and stock items As a component of supply chain management, inventory management supervises the flow of goods from manufacturers to warehouses and from these facilities to point of sale (Inventory management, lu 2020) an 1.2.2 Functions and meaning of inventory management va n To manage inventory is to: gh tn to - Make sure the quantity and characteristics of inventory stable during the production ie p - Take care of the value of inventory so that the stock so that the company nl w can avoid damage and the decrease in value to inventory d oa - Ensure the capital of the firm at the reasonable and optimal level to an lu increase the effect of capital and reduce the costs nf va Inventory management is significant because inventory is a valuable asset lm ul to the business Managing current assets in a good way will bring back great influences on the accomplishment of the tasks and goals set out by the company z at nh oi On the other hand, if these assets are not effectively used, the business activities will have difficulities Therefore, inventory management is one of the most z @ important thing to in business l gm There are two costrary sides of inventory management: - If the firm wants a continuous production and there is no interruption, co m the manager will have to increase the amount of inventory in the warehouse an Lu - On the contrary, a rise of stock makes the company bear more cost n va related to inventory ac th si 1.2.3 The costs of inventory management Ordering cost The costs relate to making orders, searching suppliers and other activities in the order process such as negociation, etc Storage cost Costs of storage includes: - Renal and other fee related: + Rental or depreciation for houses + Insuarance for warehouses or stores lu - Costs for using devices and vehicles: an + Rental or depreciation for devices and vehicles va n + Energy cost gh tn to + Equipment operating costs - Labour cost ie p - Costs of damage or broken inventory nl w - Other costs such as taxes, insurance for inventory, etc d oa 1.3 Content of inventory management an lu 1.3.1 Criterias for inventory management nf va To manage the quantity and quality of inventory by: etc to preserve goods z at nh oi lm ul - Guaranteed the condition of the warehouse such as temperature, space, - Classify the inventory suitably - Apply appropriately methods and tools to manage the inventory in the z @ strorage l gm To manage the value of inventory by: Control the capital of goods in physical form as a basis for assessing the assets of enterprises and the efficiency co m of using capital goods From there, the administrator sets the basis of a an Lu reasonable selling price and calculates the profit after sale n va ac th si 1.3.2 Models for inventory management lu an n va p ie gh tn to d oa nl w nf va an lu z at nh oi lm ul z m co l gm @ an Lu n va ac th si CHAPTER 2: PHAT DAT JSC AND THE WAREHOUSING MANAGEMENT ACTIVITIES OF THE COMPANY 2.1 Introduction of Phat Dat JSC 2.1.1 Overview lu an Company’s name: Phat Dat JSC - Location : Bac Hong, Dong Anh, Hanoi - Tell: 0977386986 - Fax: 0348836792 - Email: phatdat0666@gmail.com - Business Code: 0102018662 - Legal Representative: Truong Van Phong n va - tn to Phat Dat JSC was established in 25/08/2006 with the main business area gh is producing wood household appliances such as table, chair, etc, and office p ie stationeries like bookshelf With a wide range of products, the company has w created a flexible business activity that can help to provide the most needed oa nl product and adapt the market’s demand at an instant point d Orders from other manufacturers are taken which makes the company lu nf va an become a production supporter producing semi-finished products or accessories At the same time, the firm manufactures products based on typical designs and lm ul offers to customers by planning marketing and sale strategies These self- expanding the business m an Lu The customers of the company: co - Minh Long Production and Trading Co., Ltd l gm - Hoang Anh Gia Lai JSC @ - Dai Hiep Import and Export Co., Ltd z The suppliers of the company: z at nh oi produced products are the advantages of the company in diversifying and - TMC Hanoi production, trade and construction limited company n va ac th si The arrangement of inventory at the warehouse The company depends on the scale of production, the characteristics of material or products to decide the arrangement in the warehouse Since the complex feature of wood products and other elements, preservation is important to maintain the good condition of the inventory The warehouse’s arrangement of Phat Datis showed as Picture 3: lu an n va p ie gh tn to w oa nl Picture Warehouse's diagram Source: Synthesized by the author d meters into six main areas: nf va an lu The warehousing department divided the area of about 200 square lm ul - Next to the main entrance is the yard for parking and loading goods - The workplace of the employees combines with the showroom to - The area for raw material z at nh oi display products z @ - Small areas at the back of the warehouse for semi-finished products, and l gm valuable goods and material such as ebony and dalbergia wood - Area for goods and inventory with bulk and large product scale co m The warehouse locates near the high street so it is convenient for an Lu transporting goods The warehouse which was built in 2015 has been in good n va condition until now The building material was cement and the roof was made ac th si of high quality corrugated iron so that the weather could have little effect on the preservation of goods Although the warehouse is large, it does not have enough length to locate the inventory reasonably Sometimes there is a shortage of space and the employees have to put the products disorderedly outside Besides, the material is now hiding the semi-finished products and valuable goods Though these types of inventory are not used constantly, putting them in the corner of the warehouse would cause difficulty for managing and preserving In short, the warehouse has advantages such as great location and good lu physical condition However, the arrangement is a drawback when the places an for inventories are not reasonable and there is no space between products n va Therefore, the managing activities become harder for employees and the effect to gh tn of the business also decreases Inventory ratios ie p Analyzing inventory norms would help the managers understand the nl w activities related to the manufacture and storage of the company These norms d oa reflect the actual business situations and help detect mistakes as well as an lu solutions for better business results nf va The ability to meet production and customer needs is one of the key tasks lm ul of inventory From 2017-2019, the company's inventory selling rate reached approximately 80% However, this indicator only shows the ability to meet the z at nh oi needs of the company, not the actual inventory management level To evaluate the management of inventory, we need to calculate Inventory z turnover and Inventory conversion period We have the data as follows: @ Indicator 2017 round 2.90 2018 m 2019 1.89 2.91 an Lu turnover Unit co Inventory Formula l gm Table Calculation of Inventory turnover at Phat Dat JSC n va ac th si Inventory conversion day 120 182.3 123.5 period Source: Synthesized by the author The number of Inventory turnover in 2017 was 2.9 rounds, each round was 120 days Inventory turnover rate in 2018 decreased to 1.89 rounds The reason is that the company expanded the inventory scale but the number of products sold decreased In 2019, the pace has increased again to be 2.91 and became the highest rate in three years due to the company's stable performance lu and a much lower import volume than exports Even so, the company still needs an to recalculate a reasonable inventory to reduce management costs, and storage n va costs to increase capital, avoid congestion to improve business profits p ie gh tn to d oa nl w nf va an lu z at nh oi lm ul z m co l gm @ an Lu n va ac th si CHAPTER III: RECOMMENTDATIONS AND SOLUTIONS Comment on inventory management activities at Phat Dat JSC 1.1 Advantages In recent years, despite the volatile economy and fierce competition among competitors in the market, Phat Dat JSC still attracts new customers and enhances the business with annual sales maintained at the stable level - The company has tried to diversify the suppliers in order to improve the quality and enrich the sources of goods In addition, there is a variety of products to meet the needs of different customers The company has also lu quickly captured consumers' tastes to offer highly competitive products, an diversified in form, design, price va n - To improve the amount of products consumed, the company has made to gh tn advertising on websites Accompanied by promotions through new customer care programs In addition to improving its reputation, the company has added a ie p number of services such as warranty, product changing with defective or broken nl w products, d oa - The company's employees have diverse ages, mainly from 21-40 The an lu human resource here has a combination of young, agile workers who are ready nf va to learn new things and employees who have much experience and professional lm ul skills This combination creates not only professional but also comfortable atmosphere for employees to be able to complete the work well z at nh oi - The company has introduced new policies to improve the working efficiency and labor productivity of employees, one of which is the policy of z using bonus points Each employee who works beyond the norm, being self- @ l gm discipline, will be rewarded by their direct manager and evaluated by colleagues The points will be converted directly into money In addition, there co m are also sanctions policies to limit frauds and mistakes of regulations These an Lu policies have helped improve the working efficiency of the company in general n va and the warehouse department in particular ac th si - Although there are many types of inventory, they are all furniture and objects in the wooden industry, making inventory management and storage more convenient and helping to save classification costs - The reasonable inventory reserves help the company cope with fluctuations in the market such as prices, customer deamnd, showing that the company has a proactive business attitude - The warehouse built by the company has good conditions, which helps to preserve the products better and there is no phenomenon of products being termite, moldy during storage lu 1.2 Drawbacks an - The company has not been able to find a cheap supply, resulting in high n va cost of goods sold which reduced profits gh tn to - The inventory turnover time is long - an average of 120 days in all years analyzed The company needs to recalculate a reasonable quantity of ie p inventory to meet production and reduce inventory-related costs nl w - The arrangement and management of products in the warehouse are still d oa manual and lack of uniformity, leading to difficulties in checking and causing a an lu lot of calculation as well as efforts at the end of the accounting period nf va - The number of employees and equipment in the warehouse that does not lm ul meet the growing scale of the company Only employees are highly qualified and there is a lack of management systems and technologies In addition, z at nh oi remuneration has not met employee expectations, depressed mentality and reduced labor productivity z About the inventory activities, Phat Dat JSC currently does not have a @ l gm forecast work such as a clear demand for products, each order is based on a director's decision or a previous inventory Morover, the company has not co m developed a specific method of calculating inventories, so it is difficult to an Lu collect costs related to inventory Another point is the excess or shortage of n va ac th si inventory occurs quite often Most inventories always exceed the necessary level which leads to: - Increase in cost of maintenance, storage and the capital stagnant in inventory - Lack of capital for production and business activities - Inventories are not well controlled and outdated due to technology failure to catch up 1.3 New situation and background In 2020, the economy of Vietnam is predicted not to have good growth lu due to the coronavirus pandemic GDP and other important indexes are also an expected to decrease because of lower demand and the limitation of business n va activities, etc This new global economic crisis impacts on every country and to gh tn industry in the world Phat Dat JSC is not the exception when the wooden industry was said to have low development for the first time in ten years ie p (Nguyen, 2020) nl w The outbreak has a great effect on the capacity of transportation and d oa consumption The price for material is now rising because of the difficulty in an lu logistics and shipment that made the average price level rise 2-3 USD on cubic nf va meters China, the main source of supply and also a huge customer is now limiting import and export activities, which makes the situation more difficult lm ul Some other problems that the company has to suffer from are the decrease of z at nh oi orders and the cost to maintain the business The new situation and policies of the government to fight against the virus made the company reduce the output z And to overcome all the challenges, the company need to change their @ gm way not only in 2020 but also in the near future The main supply of material co l from China should be replaced by other sources Also, the inventory will need m to be adjusted to cut down the cost but still ensure the production of the to be cared more by the company an Lu company The inventory management which plays an important role will need n va ac th si Recommendations and solutions 2.1 Development orientation in the future Long-term orientation: Phat Dat JSC is a company that mainly supplies wooden products, the company always focuses on product quality and customer service Human resources have differences in professional qualifications, cultural levels, awareness levels, social relations, geographic location, which create diversity and complexity in the working environment Improving corporate culture, training qualified and responsible staff members is one of the company's long- lu term development goals an In the future, the company plans to focus more on developing furniture n va production, expanding the variety of designs and items with the goal of to gh tn becoming a quality and trusted supplier of furniture by customers To achieve these goals, the company needs to: ie p - Build a qualitative workforce, improve organization and operation nl w effectively d oa - Ensure the balance between revenue and expenditure, using the nf va and risk factors an lu investment capital effectively, forecasting and eliminating from bad debt step lm ul - Research the market carefully and look for opportunities to implement intensive production strategies and create stability in business to take initiative z at nh oi in market fluctuations - Develop marketing stratergies to maintain old customers while z @ developing a new customer base l gm - Create and promote the image of a professional company to customers, and spread the brand in the community in an extensive way co m - Develop service and post-service activities both in quantity and quality an Lu n va ac th si - Promote sales promotion activities such as building product images, product introduction videos or organizing factory tours, service and product introduction sessions Short-term orientation: The optimistic point is that Vietnam's timber industry is likely to break out when the Chinese market (the biggest competitor) is "frozen" because of the disease But opportunities are only opportunities if businesses are unable to connect with customers because of the pandemic Therefore, the company need to turn the traditional way of business into new and mordern activities lu One of the effective choice is ecommerce Phat Dat will need to showcase an the products on ecommerce platforms and invest on its own website to promote n va sale gh tn to For the inventory, the company will have adjust the plan for purchase and production in 2020 The amount of inventory bought need to be decreased yet ie p maintain at a stable level so that the manufacture can work when the situation nl w become normal d oa The company also has to limit the cut down of the laborforce since this is an lu one of the most valuable asset The solution might be working as shifts and nf va negotiate with employees to reduce wages lm ul 2.2 The ABC inventory system The ABC analysis is an inventory categorization technique (Wikipedia: ABC z at nh oi analysis, n.d.) This method is used to divide the inventory into three categories (A, B, C) in order of their importance z “A” products are the most valuable and important and they need frequent @ gm value analysis “B” and “C” are less important items than A when these co l products’ value is lower and they account for lower consumption too The m application of ABC system will help classify the inventory and the company can an Lu have suitable ways of storing different types of goods n va ac th si To apply this method in the warehousing activities of the company, we need to know about the products and also their value, quality, etc Table will introduce the inventory with specific data (note: the table only provides information about main self-produced goods and regardless of semi-finished products and inventories which are not in the warehouse regularly): Table Classification of main products Price No Types of lu products Annual demand an (unit) Proportion per unit to the quantity (%) Total of Proportion value products (million (million dong) to the value (%) va n dong) 90 25.13% 0.5 45 6.9% 77 21.5% 2.2 169.4 26% 42 11.73% 3.6 151.2 23.1% 33.8% 0.3 36.3 5.5% 28 7.84% 252 38.5% 100% 15.6 653.9 100% gh tn 4-unit lu to shelf ie 2-drawer p nl w chest Bookcase Chair Wardrobe d oa 121 Source: Synthesized by the author z at nh oi lm ul 358 nf va an Total ABC analysis does not have a fixed proportion for each class; however, base on the core rule is that A will have a large percentage of the value, but a z small share of the quantity and vice versa for B or C Therefore, the products of Table Classes of products Proportion to total Proportion to total inventory quanlity annual value m an Lu No co Categories l gm @ Phat Dat can be divided as follows: n va ac th si A 3,5 19.57% 58.6% B 21.5% 26% C 1,4 58.93% 12.4% 100% 100% Total Source: Synthesized by the author After classifying the products, the company should pay attention to which types of products to produce and hoard The capital would be used suitably between groups and it is also important that the company need to calculate different auditing cycle for each group: lu - Products in class A should be audited and checked more frequently and an the recommendation is once a month va n - Class B will have a longer audit cycle such as months and class C to gh tn might have approximately months The warehousing department could formulate a plan to manage inventory ie p according to the following table: Class Quantity Audit cycle Quantity of inventory audited a d oa nl w Table Plan of auditing the inventory 70 20 days 70/20 = 3.5 products per day B 77 50 days 77/50 = 1.5 products per day C 211 100 days 211/110 = 2.1 products per day nf va A an lu day z at nh oi lm ul 7.1 products per day z 2.3 EOQ model Source: Synthesized by the author @ gm Economic Order Quantity – EOQ is one of the methods to help manage co l inventory effectively It is the ideal order quantity a company should purchase m to minimize inventory costs such as holding costs, shortage costs, and order an Lu costs (Will, 2020) EOQ will help the company to find the optimal number of n va products to order and cut down the cost of buying, transportation, etc EOQ ac th si helps to manage the cash flow in the inventory balance and for this model, the company also can decide the reorder point The formula of EOQ is shown as: √ With Q* = EOQ units D = Demand in units S = Order cost H = Holding cost It is important to know all the information about D, S and H of Phat Dat lu Co., LTD in 2018 and 2019 (the number of working day is 300 days a year) an n va Table shows the inventory demand in 2018 and 2019 as follows: tn to Table Inventory demand in 2018-2019 Formula 2019 Inventory demand Beginning inventory + Inventory 1263 1032 p ie gh 2018 received during the year – w every year (D) Inventory demand 3.21 ⁄ 3.62 nf va an lu every day (L) d oa nl Ending inventory Source:Inventory checking thesis in 2018-2019 lm ul Then, we have the costs for order in table 9: z at nh oi Table 10 Order cost for order Unit: dong Costs involved 50,000 gm 4,500,000 400,000 3,800,000 300,000 co l Freight and inspection cost 50,000 @ Order cost (S) Delivery cost 2019 z Contacting cost 2018 m Source: Synthesized by the author an Lu Finally, find the cost of storing for unit of products in this period n va ac th si Table 11 Holding cost for unit of inventory in 2018-2019 Unit: dong Formula Total 2018 holding 2019 73,000,000 75,300,000 59,061 73,000 cost Holding cost for unit (H) Source: Synthesized by the author Based on the data collected, we calculate the quantity order (Q*) and other important targets assuming that every order has L equal lu an Table 12 Calculation of optimal quantity and other targets va Formula 2018 2019 n tn to 460.12 units 342.5 units 65.7 days 48.9 days 22.47 units 25.34 units 2.74 orders 3.01orders √ EOQ units (Q*) p ie gh Optimal holding Reorder point oa nl w period (T) d L*d nf va lm ul of order (n) an Optimal number lu (ROP) Source: Synthesized by the author z at nh oi From these tables, it is clear that the real quantity of order (Q) of the company is higher than the ideal quantity (Q*) calculated from EOQ method z @ Table 12 compares these two number as bellow: l gm Table 13 Comparision between real quantity order and optimal quantity order co 2019 m 2018 Unit: unit 605.58 535.24 Q* 460.12 342.5 an Lu Q n va ac th si Source: Synthesized by the author The large excess of inventory increased several costs including labor cost, opportunity cost, etc and cause waste of sources for inventory However, the EOQ model only includes order cost and holding cost Other important costs such as purchasing cost, damage cost when there are no goods, so that the result of this model is not completely correct to the real business situation 2.4 Reorganizing the warehouse In chapter 2, the Warehouse's diagram shows drawbacks and it is possible to have better arrangement in the warehouse The new arrangement is suggested as Picture 4: lu an n va p ie gh tn to d oa nl w nf va an lu z at nh oi lm ul Picture New warehouse's diagram Source: Synthesized by the author z Since the warehouse has good condition and types of inventory has been @ gm divided, the new diagram recommends to put the inventory in parallel Two co l paths (grey areas) that have the width enough for forklift would be added m Moreover, the inventory with high value will be moved to outside, near the an Lu showroom so that visitors could know about these products This new n va ac th si arrangement expected to overcome the circumstance of inventory hidden and difficulty to pick 2.5 System to support inventory management The VsoftBMS.IM software is recommended since it was built and designed completely new with Microsoft NET V2.0 and SQL Server 2005 technology, full Unicode Font support, and fully compatible with Windows The software also can integrate and expand business management into a complete solution for enterprise management (such as integration of remote management thesiss, integration of business booths on the Internet, ) lu Some of the advantages of VsoftBMS.IM are: an - The software was designed to manage data in the system easier va n - VsoftBMS.IM let the center know the operation situation by real-time in to gh tn the warehouse From the headquarter, the manager could control every activity in the warehouse ie p - VsoftBMS.IM also helps aggregate data from sources and give analysis d oa nl w for system activities nf va an lu z at nh oi lm ul z m co l gm @ an Lu n va ac th si CONCLUSION In recent years, the continuous development of the world economy has led to the development of a global supply chain in which warehousing is indispensable It can be said that warehousing acitivities in general and warehousing management in particular are and will play an essential role in the global economy During my internship at Phat Dat JSC, I had a better overview of warehousing management and warehouse operations of a company Thereby, I realize that the knowledge I have is very little and I will need more learning to lu be able to catch up with the development of the era and to open up career an opportunities for myself va n Due to time constraints and qualifications, the analysis and evaluation in to gh tn the thesis are still many errors and subjective of the author The solutions given in this article have not been optimized I look forward to the appreciation and ie p suggestions from the teachers nl w Once again, I would like to express my appreciation to Ph.D Pham Ngoc an lu me with this thesis d oa Tru and employees at the warehousing department of Phat Dat JSC for helping nf va Hanoi, 5/2020 z at nh oi lm ul z m co l gm @ an Lu n va ac th si