Inventory Management in a Selected Bakery for Productivity Enhancement in South-Western Nigeria Using MRP Approach

Mojisola A. Bolarinwa; Sakiru K. Ekun; Stephen G. Onyeukwu

Mojisola A. Bolarinwa Department of Industrial and Production Engineering, University of Ibadan, Ibadan, Nigeria
Sakiru K. Ekun Department of Industrial and Production Engineering, University of Ibadan, Ibadan, Nigeria
Stephen G. Onyeukwu Department of Industrial and Production Engineering, University of Ibadan, Ibadan, Nigeria

Keywords: Inventory management, Bakeries, Material requirement planning, Pareto Analysis, Quantitative research method

Abstract

Effective inventory management is vital for the sustainability and productivity of bakeries, especially in developing countries like Nigeria, where the majority are operated by small and medium-sized enterprises. However, many bakeries face significant challenges in managing their raw material inventories, leading to operational inefficiencies, increased costs, and potential business failure. This study was focused on investigating the application of a modified material requirement planning to enhance the productivity of bakeries in Nigeria. Data were collected from a selected bakery that currently practice a just-in-time inventory management strategy. A quantitative research method was developed, integrating activity-based costing classification through Pareto analysis, the economic order quantity model, and a master production schedule to effectively manage the inventory of the bakeries. Results from the inventory classification showed that flour and sugar are the essential raw materials for the selected bakery, highlighting the need to prioritize these items in the inventory planning process. The findings of the study presented significant financial savings for the bakery. The quantities of raw material to be ordered were reduced, with flour reducing from 200 tons to 102 tons. The total cost of inventory in the bakery was reduced from N7,526,080 per week to N6,937,211, presenting a saving of 7.8% per week. This significantly contributes to the long-term viability and competitiveness of bakeries in the labour market. This study is not only recommended to bakeries within Nigeria but also serves as a valuable guide for similar enterprises seeking to streamline their inventory processes and boost their productivity.

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