Scanning inventory levels and policies for postal retail

E. Vreys, W. Dullaert

This paper addresses the stock holding and replenishment process at the lowest echelon of postal retail. The research has shown that the organisation’s supply chain at the Belgian Post is characterised by severe stock excesses. These are the outcome of process deficiencies induced by insufficient systems support, a lack of database maintenance, poor parameter setting, a lack of reporting and follow-up, and the established practices. Quantitative evidence was obtained by executing a distribution audit. Consequently, a new inventory policy needed to be developed to indicate the impact of a more scientific approach in terms of cost savings. Testing the final model, a periodic review system based upon forecasted demand, clearly demonstrates that a serious inventory reduction can be achieved. It is highlighted that higher forecasting accuracy, in combination with the application of formal inventory management principles, results in a better harmony between supply and demand.

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