A9.

INTEGRATIVE PROJECT STAGE 3

MATERIALS MANAGEMENT

TEAM 8

ARMANDO JESUS NAVARRO MUÑOZ

PERLA ILIAN OBREGON MORALES
ABRAHAM LOPEZ FRIAS
PABLO URIEL ORTIZ GUARDIOLA

DATE: 12/12/2021
 Stage 1: Company selection

❖ Company background

Once we shared the information among the coworkers we selected the company in which Etni
works called Auto llantas Avante, dedicated to the sale and change of tires for all types of
vehicles, due to the amount of inventory that is handled in the tire shop we only selected three
brands which are Bridgestone, Continental and Goodyear, giving a total of 56 products.

The Company

Grupo Avante will continue to develop its distribution chain until it is considered the best option
for consumers in terms of service, quality and price.

Every day Grupo Avante increases the number of visits to its website, to the point that we are the
main tire sales page in Mexico.

Who are we?

Grupo Avante began its activities in 1970 in Mexico City with one store. In the following years,
the company managed to set a steady growth by opening more stores in the same city. However,
it was not until the 1980s that the company decided to develop a strategy of expansion to the rest
of the national territory.
 Our His

1973

The 6th son of 10 siblings, born in San Luis Potosi, at the early age of
13 he began to venture into the world of commerce. He soon realized
how difficult it would be to consolidate in a world controlled by large
monopolies; however, because of his vision and enthusiasm
accompanied by great drive and dedication, he was able to strengthen
himself, developing a plan
to form what we are today, GRUPO AVANTE.

1997

The first own-brand tire is manufactured, first manufactured by

Goodyear, then by Tornel and finally in 1999 by Hankook, producing a
full range with high quality standards.

2002

Michelin joins the strength of manufacturers that support us.

TODAY
After more than three decades of adaptations
and efforts, the success is resounding from
the first day: a small branch until today the
Group that distributes the most recognized
an unrepeatable and exclusive brands that guarantee quality
setting. and best prices in the market in
 Grupo Avante is a 100% Mexican company with branches and distributors throughout the
different cities of the Republic, today, after 44 years, there are more than 700 distributors and
more than 114 branches in the North - Southeast division, with more than 900 employees.
❖ Inventory

Next, we will see the inventory with which we will work on our project.

REFACCIONARIA AVANTE CDMX

BRIDGESTONE 01/08/2020
Code Description Existence Cost Total
Amount

020321575140620 LT215/75R14 BRIDGESTONE M773 ALL TERRAIN 104/101R BLK 8C 198 $2,685.00 $ 531,630.00

020323555170450 P235/55R17 BRIDGESTONE TURANZA ER300 103V BLK XL 3 $2,481.00 $ 7,443.00

020322545190640 P225/45R19 BRIDGESTONE POTENZA RE050 96W BLK 11 $1,800.00 $ 19,800.00

020323545190730 P235/45R19 BRIDGESTONE POTENZA S001 95W 95W BLK 39 $1,672.00 $ 65,208.00

020324555190010 P245/55R19 BRIDGESTONE DUELER HL 400 103S 1 $3,020.00 $ 3,020.00

020326550200600 P265/50R20 BRIDGESTONE DUELER HP 92A 107V BLK 19 $2,350.00 $ 44,650.00

020327550200010 P275/50R20 BRIDGESTONE DUELER HL 400 109H BLK 11 $2,054.00 $ 22,594.00

CONTINENTAL 01/08/2020
Code Description Existence

030318560150890 P185/60R15 CONTINENTAL CONTI ECO CONTACT 5 84H BLK OE 1 $1,562.00 $ 1,562.00

030319565150810 P195/65R15 CONTINENTAL CONTIPREMIUMCONTACT 2 91H BLK OE 42 $1,354.00 $ 56,868.00

030319580150970 LT195/R15 CONTINENTAL CONTIVANCONTACT100 106/104S BLK 8C 109 $1,785.00 $ 194,565.00

030319555160410 P195/55R16 CONTINENTAL CONTIPROCONTACT 86H BLK 18 $1,356.00 $ 24,408.00

030320565160970 LT205/65R16 CONTINENTAL CONTIVANCONTACT100 107/105T BLK 8C 12 $1,862.00 $ 22,344.00

030320570160410 P205/70R16 CONTINENTAL CONTIPROCONTACT 96H BLK OE 5 $1,800.00 $ 9,000.00

030320575160960 LT205/75R16 CONTINENTAL VANCONTACT AP 110/108R 8C 1 $1,687.00 $ 1,687.00

030320560160590 P205/60R16 CONTINENTAL CONTIPOWERCONTACT 92H BLK 183 $3,450.00 $ 631,350.00

030321585161180 LT215/85R16 CONTINENTAL VANCONTACT A/S ALL-SEASON 115/112Q BLK 10C 20 $3,000.00 $ 60,000.00

030328565160970 LT285/65R16 CONTINENTAL CONTIVANCONTACT 100 131R BLK 10C 49 $3,125.00 $ 153,125.00

030328565161180 LT285/65R16 CONTINENTAL VANCONTACT A/S ALL-SEASON 131R BLK 10C 11 $2,980.00 $ 32,780.00

030321555180410 P215/55R18 CONTINENTAL CONTIPROCONTACT 94H BLK OE 16 $2,850.00 $ 45,600.00

GOODYEAR 01/08/2020
Code Description Existence

070317570132360 P175/70R13 GOODYEAR DIRECTION TOURING 82T BLK 156 $2,685.00 $ 418,860.00

070317570132170 P175/70R13 GOODYEAR ASSURANCE 82T BLK 190 $2,600.00 $ 494,000.00

070318570132170 P185/70R13 GOODYEAR ASSURANCE 86T BLK 83 $2,700.00 $ 224,100.00

070317565142170 P175/65R14 GOODYEAR ASSURANCE 82T BLK 109 $2,800.00 $ 305,200.00

070317570142170 P175/70R14 GOODYEAR ASSURANCE 88T BLK XL 19 $2,145.00 $ 40,755.00

070318560142170 P185/60R14 GOODYEAR ASSURANCE 82T BLK 168 $2,500.00 $ 420,000.00

070318565142560 P185/65R14 GOODYEAR DIRECTION SPORT 86H BLK 1 $2,750.00 $ 2,750.00

070318565141020 P185/65R14 GOODYEAR GPS3 SPORT 86T BLK 199 $3,000.00 $ 597,000.00

070318560152290 P185/60R15 GOODYEAR DP-V1 84T BLK OE 129 $3,500.00 $ 451,500.00

070319580153260 LT195/R15 GOODYEAR CARGO MARATHON 2 106/104Q BLK 8C 154 $3,200.00 $ 492,800.00

070320565152450 P205/65R15 GOODYEAR WRANGLER SUV 94H BLK 43 $3,500.00 $ 150,500.00

LT31X10.50R15 GOODYEAR WRANGLER ADVENTURE DURAWALL ALL TERRAIN
070331105151230 109S BLK 6C 151 $3,600.00 $ 543,600.00

070320560162790 P205/60R16 GOODYEAR EFFICIENT GRIP PERFORMANCE 92V BLK 115 $2,500.00 $ 287,500.00

070320565162250 LT205/65R16 GOODYEAR CARGO MARATHON 107/105T BLK 8C OE 164 $3,550.00 $ 582,200.00

070320555162150 P205/55R16 GOODYEAR EAGLE SPORT 91V BLK 187 $3,000.00 $ 561,000.00

070321545162790 P215/45R16 GOODYEAR EFFICIENTGRIP PERFORMANCE 86H BLK 175 $2,950.00 $ 516,250.00

070321565162450 P215/65R16 GOODYEAR WRANGLER SUV 98H BLK 22 $2,900.00 $ 63,800.00

070324575162260 LT245/75R16 GOODYEAR WRANGLER ARMORTRAC ALL TERRAIN 114/111S BLK 8C 32 $2,000.00 $ 64,000.00

070325570162260 LT255/70R16 GOODYEAR WRANGLER ARMORTRAC ALL TERRAIN 115/112T BLK 8C 112 $2,350.00 $ 263,200.00

070326575162260 LT265/75R16 GOODYEAR WRANGLER ARMORTRAC ALL TERRAIN 119/116R BLK 8C 60 $2,000.00 $ 120,000.00

070322545172150 P225/45R17 GOODYEAR EAGLE SPORT ALL-SEASON 94W BLK XL 59 $3,680.00 $ 217,120.00

070322545172790 P225/45R17 GOODYEAR EFFICIENT GRIP PERFORMANCE 94W BLK XL 180 $4,000.00 $ 720,000.00

070322555170960 P225/55R17 GOODYEAR EAGLE RS-A 95V BLK OE 41 $3,800.00 $ 155,800.00

070323560172030 P235/60R17 GOODYEAR ASSURANCE COMFORTRED TOURING 102H BLK 1 $2,300.00 $ 2,300.00

070323565172050 P235/65R17 GOODYEAR ASSURANCE COMFORTRED TOURING 104H BLK 55 $2,400.00 $ 132,000.00

070375000171810 LT7.50-17 GOODYEAR TRAGALEGUAS II 121/116L 10C S/C 75 $2,000.00 $ 150,000.00

070323545181700 P235/45R18 GOODYEAR EAGLE LS-2 94V BLK OE 164 $2,600.00 $ 426,400.00

070322555193440 P225/55R19 GOODYEAR ASSURANCE MAXLIFE TREADLIFE 99V BLK 33 $2,540.00 $ 83,820.00

070325560190960 P255/60R19 GOODYEAR EAGLE RS-A 108H BLK OE 92 $2,365.00 $ 217,580.00

070324550202100 P245/50R20 GOODYEAR EFFICIENTGRIP SUV 102V BLK 116 $2,000.00 $ 232,000.00

070324540202700 P245/40R20 GOODYEAR EXCELLENCE 99Y BLK 1 $2,150.00 $ 2,150.00

070326550202080 P265/50R20 GOODYEAR FORTERA HL 107T BLK OE 126 $2,000.00 $ 252,000.00

070328535203050 P285/35R20 GOODYEAR EAGLE F1 SUPERCAR G:2 (L) 100Y BLK OE 1 $1,900.00 $ 1,900.00

070328535203060 P285/35R20 GOODYEAR EAGLE F1 SUPERCAR G:2 (R) 100Y BLK OE 1 $1,960.00 $ 1,960.00
LT35X12.50R20 GOODYEAR WRANGLER MT/R KEVLAR MUD TERRAIN 121Q BLK 10C
070335125201940 2 $1,870.00 $ 3,740.00

070330545220470 P305/45R22 GOODYEAR FORTERA SL 118H BLK 38 $1,800.00 $ 68,400.00

070311002252580 11R22.5 GOODYEAR G665 LINEAR/ALL POSITION 148/145J 16C 42 $1,900.00 $ 79,800.00

These are the products we will be working with in our project.

 ❖ Customers
In the following table you will find the way in which our products are delivered to our
customers.

TYPE OF PRODUCT DELIVERY

AT POINT OF E-MAIL DIGITAL
CODE DESCRIPTION SALE TELEF SALES BRANCH
LT215/75R14 BRIDGESTONE M773 ALL
020321575140620 TERRAIN 104/101R BLK 8C X X X X X
P235/55R17 BRIDGESTONE TURANZA
020323555170450 ER300 103V BLK XL X X X X X
P225/45R19 BRIDGESTONE POTENZA
020322545190640 RE050 96W BLK X X X X X
P235/45R19 BRIDGESTONE POTENZA
020323545190730 S001 95W 95W BLK X X X X X
P245/55R19 BRIDGESTONE DUELER HL
020324555190010 400 103S X X X X X
P265/50R20 BRIDGESTONE DUELER HP
020326550200600 92A 107V BLK X X X X X
P275/50R20 BRIDGESTONE DUELER HL
020327550200010 400 109H BLK X X X X X
P185/60R15 CONTINENTAL CONTI ECO
030318560150890 CONTACT 5 84H BLK OE X X X X X
P195/65R15 CONTINENTAL
030319565150810 CONTIPREMIUMCONTACT 2 91H BLK OE X X X X X
LT195/R15 CONTINENTAL
030319580150970 CONTIVANCONTACT100 106/104S BLK X X X X X
8C
P195/55R16 CONTINENTAL
030319555160410 CONTIPROCONTACT 86H BLK X X X X X
LT205/65R16 CONTINENTAL
030320565160970 CONTIVANCONTACT100 107/105T BLK 8C X X X X X
P205/70R16 CONTINENTAL
030320570160410 CONTIPROCONTACT 96H BLK OE X X X X X
LT205/75R16 CONTINENTAL
030320575160960 VANCONTACT AP 110/108R 8C X X X X X
P205/60R16 CONTINENTAL
030320560160590 CONTIPOWERCONTACT 92H BLK X X X X X
LT215/85R16 CONTINENTAL
VANCONTACT A/S ALL-SEASON
115/112Q BLK 10C X X X X X
030321585161180
LT285/65R16 CONTINENTAL
030328565160970 CONTIVANCONTACT 100 131R BLK 10C X X X X X
LT285/65R16 CONTINENTAL
VANCONTACT A/S ALL-SEASON 131R X X X X X
030328565161180 BLK 10C
P215/55R18 CONTINENTAL
030321555180410 CONTIPROCONTACT 94H BLK OE X X X X X
P175/70R13 GOODYEAR DIRECTION
070317570132360 TOURING 82T BLK X X X X X
P175/70R13 GOODYEAR ASSURANCE
070317570132170 82T BLK X X X X X
P185/70R13 GOODYEAR ASSURANCE
070318570132170 86T BLK X X X X X
P175/65R14 GOODYEAR ASSURANCE
070317565142170 82T BLK X X X X X
P175/70R14 GOODYEAR ASSURANCE
070317570142170 88T BLK XL X X X X X
P185/60R14 GOODYEAR ASSURANCE
070318560142170 82T BLK X X X X X
P185/65R14 GOODYEAR DIRECTION
070318565142560 SPORT 86H BLK X X X X X
P185/65R14 GOODYEAR GPS3 SPORT
070318565141020 86T BLK X X X X X
P185/60R15 GOODYEAR DP-V1 84T BLK
070318560152290 OE X X X X X
LT195/R15 GOODYEAR CARGO
070319580153260 MARATHON 2 106/104Q BLK 8C X X X X X
 P205/65R15 GOODYEAR WRANGLER SUV
070320565152450 94H BLK X X X X X
LT31X10.50R15 GOODYEAR WRANGLER
ADVENTURE DURAWALL ALL TERRAIN
109S BLK 6C X X
070331105151230
P205/60R16 GOODYEAR EFFICIENT GRIP
070320560162790 PERFORMANCE 92V BLK X X X X X
LT205/65R16 GOODYEAR CARGO
070320565162250 MARATHON 107/105T BLK 8C OE X X X X X
P205/55R16 GOODYEAR EAGLE SPORT
070320555162150 91V BLK X X X X X
P215/45R16 GOODYEAR EFFICIENTGRIP
070321545162790 PERFORMANCE 86H BLK X X X X X
P215/65R16 GOODYEAR WRANGLER SUV
070321565162450 98H BLK X X X X X
LT245/75R16 GOODYEAR WRANGLER
ARMORTRAC ALL TERRAIN 114/111S BLK
8C X X X X X
070324575162260
LT255/70R16 GOODYEAR WRANGLER
ARMORTRAC ALL TERRAIN 115/112T BLK
8C X X X X X
070325570162260
LT265/75R16 GOODYEAR WRANGLER
ARMORTRAC ALL TERRAIN 119/116R BLK X X X X X
070326575162260 8C
P225/45R17 GOODYEAR EAGLE
070322545172150 SPORT ALL-SEASON 94W BLK XL X X
P225/45R17 GOODYEAR EFFICIENT GRIP
070322545172790 PERFORMANCE 94W BLK XL X X
P225/55R17 GOODYEAR EAGLE RS-A 95V
070322555170960 BLK OE X X
P235/60R17 GOODYEAR ASSURANCE
070323560172030 COMFORTRED TOURING 102H BLK X X X X X
P235/65R17 GOODYEAR ASSURANCE
070323565172050 COMFORTRED TOURING 104H BLK X X X X X
LT7.50-17 GOODYEAR TRAGALEGUAS II
070375000171810 121/116L 10C S/C X X X X X
P235/45R18 GOODYEAR EAGLE LS-2 94V
070323545181700 BLK OE X X X X X
P225/55R19 GOODYEAR ASSURANCE
070322555193440 MAXLIFE TREADLIFE 99V BLK X X X X X
P255/60R19 GOODYEAR EAGLE RS-A
070325560190960 108H BLK OE X X X X X
P245/50R20 GOODYEAR EFFICIENTGRIP
070324550202100 SUV 102V BLK X X X X X
P245/40R20 GOODYEAR EXCELLENCE
070324540202700 99Y BLK X X
P265/50R20 GOODYEAR FORTERA HL
070326550202080 107T BLK OE X X
P285/35R20 GOODYEAR EAGLE F1
070328535203050 SUPERCAR G:2 (L) 100Y BLK OE X X X X X
P285/35R20 GOODYEAR EAGLE F1
070328535203060 SUPERCAR G:2 (R) 100Y BLK OE X X X X X
LT35X12.50R20 GOODYEAR WRANGLER
MT/R KEVLAR MUD TERRAIN 121Q BLK X X
070335125201940 10C
P305/45R22 GOODYEAR FORTERA SL
070330545220470 118H BLK X X
11R22.5 GOODYEAR G665 LINEAR/ALL
070311002252580 POSITION 148/145J 16C X X X X X
 Our sales for the month of October according to our inventory and cost of sales.

Sales for the month of

October
Code Description Existence Sales Cost Total Sales
LT195/R15 CONTINENTAL CONTIVANCONTACT100 106/104S BLK
030319580150970 8C 109 1 $1,785.00 $ 1,785.00
070324550202100 P245/50R20 GOODYEAR EFFICIENTGRIP SUV 102V BLK 116 1 $2,000.00 $ 2,000.00
020327550200010 P275/50R20 BRIDGESTONE DUELER HL 400 109H BLK 11 1 $2,054.00 $ 2,054.00
020326550200600 P265/50R20 BRIDGESTONE DUELER HP 92A 107V BLK 19 1 $2,350.00 $ 2,350.00
070317570132170 P175/70R13 GOODYEAR ASSURANCE 82T BLK 190 1 $2,600.00 $ 2,600.00
070323545181700 P235/45R18 GOODYEAR EAGLE LS-2 94V BLK OE 164 1 $2,600.00 $ 2,600.00
070317570132360 P175/70R13 GOODYEAR DIRECTION TOURING 82T BLK 156 1 $2,685.00 $ 2,685.00
020323545190730 P235/45R19 BRIDGESTONE POTENZA S001 95W 95W BLK 39 2 $1,672.00 $ 3,344.00
070320560162790 P205/60R16 GOODYEAR EFFICIENT GRIP PERFORMANCE 92V BLK 115 2 $2,500.00 $ 5,000.00
070318565141020 P185/65R14 GOODYEAR GPS3 SPORT 86T BLK 199 2 $3,000.00 $ 6,000.00
LT285/65R16 CONTINENTAL CONTIVANCONTACT 100 131R BLK
030328565160970 10C 49 2 $3,125.00 $ 6,250.00
LT265/75R16 GOODYEAR WRANGLER ARMORTRAC ALL TERRAIN
070326575162260 119/116R BLK 8C 60 4 $2,000.00 $ 8,000.00
030321555180410 P215/55R18 CONTINENTAL CONTIPROCONTACT 94H BLK OE 16 3 $2,850.00 $ 8,550.00
070319580153260 LT195/R15 GOODYEAR CARGO MARATHON 2 106/104Q BLK 8C 154 3 $3,200.00 $ 9,600.00
030320560160590 P205/60R16 CONTINENTAL CONTIPOWERCONTACT 92H BLK 183 3 $3,450.00 $ 10,350.00
070321565162450 P215/65R16 GOODYEAR WRANGLER SUV 98H BLK 22 4 $2,900.00 $ 11,600.00
LT285/65R16 CONTINENTAL VANCONTACT A/S ALL-SEASON 131R
030328565161180 BLK 10C 11 4 $2,980.00 $ 11,920.00
070322545172150 P225/45R17 GOODYEAR EAGLE SPORT ALL-SEASON 94W BLK XL 59 4 $3,680.00 $ 14,720.00
LT31X10.50R15 GOODYEAR WRANGLER ADVENTURE DURAWALL
070331105151230 ALL TERRAIN 109S BLK 6C 151 5 $3,600.00 $ 18,000.00
020321575140620 LT215/75R14 BRIDGESTONE M773 ALL TERRAIN 104/101R BLK 8C 198 21 $2,685.00 $ 56,385.00
$ 185,793.00

❖ Justification for redesigning or implementing improvements to the

organization's current inventory management process.

As we can see at present our sales have presented several variations since we have not had a very
variable sales record, however we can see that in this last month we have a rebound in sales so
we will have an end of the year with an increase in our sales.
 2020
Mon Sales
th
January $ 359,875.00
February $ 163,250.00
March $ 60,589.00
April $ 85,090.00
May $ 90,856.00
June $ 75,230.00
July $ 85,420.00
August $ 50,623.00
September $ 185,793.00
October $ -
November $ -
December $ -

𝑥 − 𝑥1
𝑌 = 𝑦 + [( ) (𝑦 − 𝑦 )]
1 𝑥2 − 𝑥1 2 1
12 − 1
𝑌= ) (185793 − 359875)]
3598 8 − 1
75 +
[(

11
𝑌 = 359875 + [( )(−174082)]
7

𝑌 = 359875 + [(1.57)(−174082)]

𝑌 = 86318

As we can see, there is a low rate of gain at the end of the year due to the pandemic in the world;
however, we will continue with gains.
 ❖ Diagnosis of the supply process Storage

The racks will be organized by numbering and lettering each of the sections; the numbering will
be done from the bottom to the top so that the last numbers correspond to the least sold products
and remain at the top of the racks.

A nomenclature system will be created in which each product will be assigned an aisle, level and
location number. Having all of this defined makes it easier to train personnel and saves time on
accommodations and supplies. It will also prevent overstaffing, in addition to avoiding accidents.

❖ Description and analysis of stock level

The ABC method is useful for streamlining warehousing processes. It allows us to identify items
that have a relevant impact on the overall value (inventory, sales, costs, etc.). It allows us to
create product categories that require different levels and modes of control.

The idea is to achieve greater control over inventory and determine where we should focus our
efforts.
The ABC Method establishes 3 groups of goods within the warehouse, classifying them into
Group A, Group B and Group C. The groups go from the most important to the least important,
and can be considered as number of items, value, return, benefits, etc. Thus group A will be the
most important and group C the least important.

It is important to remember: a small percentage of our products represents almost all of our
value; therefore, we must focus on group A of our products.

Great care will be taken in group A products, to establish reorder points and not to neglect
inventory levels.

Likewise, it is important not to neglect group B inventory, since it represents an important value
within the company.

Based on sales for the month of October, we consider:

G
Group A
Group B
Group C

Code Description Existence Sales

LT215/75R14 BRIDGESTONE M773 ALL TERRAIN 104/101R BLK
020321575140620 8C 198 21
LT31X10.50R15 GOODYEAR WRANGLER ADVENTURE
070331105151230 DURAWALL ALL TERRAIN 109S BLK 6C 151 5
LT265/75R16 GOODYEAR WRANGLER ARMORTRAC
070326575162260 ALL TERRAIN 119/116R BLK 8C 60 4
070321565162450 P215/65R16 GOODYEAR WRANGLER SUV 98H BLK 22 4
LT285/65R16 CONTINENTAL VANCONTACT A/S ALL-SEASON
030328565161180 131R BLK 10C 11 4
P225/45R17 GOODYEAR EAGLE SPORT ALL-SEASON 94W BLK
070322545172150 XL 59 4
030321555180410 P215/55R18 CONTINENTAL CONTIPROCONTACT 94H BLK OE 16 3
LT195/R15 GOODYEAR CARGO MARATHON 2 106/104Q BLK 8C
070319580153260 154 3
030320560160590 P205/60R16 CONTINENTAL CONTIPOWERCONTACT 92H BLK 183 3
020323545190730 P235/45R19 BRIDGESTONE POTENZA S001 95W 95W BLK 39 2
P205/60R16 GOODYEAR EFFICIENT GRIP PERFORMANCE
070320560162790 92V BLK 115 2
070318565141020 P185/65R14 GOODYEAR GPS3 SPORT 86T BLK 199 2
LT285/65R16 CONTINENTAL CONTIVANCONTACT 100 131R BLK
030328565160970 10C 49 2
LT195/R15 CONTINENTAL CONTIVANCONTACT100 106/104S BLK
030319580150970 8C 109 1
070324550202100 P245/50R20 GOODYEAR EFFICIENTGRIP SUV 102V BLK 116 1
020327550200010 P275/50R20 BRIDGESTONE DUELER HL 400 109H BLK 11 1
020326550200600 P265/50R20 BRIDGESTONE DUELER HP 92A 107V BLK 19 1
070317570132170 P175/70R13 GOODYEAR ASSURANCE 82T BLK 190 1
070323545181700 P235/45R18 GOODYEAR EAGLE LS-2 94V BLK OE 164 1
070317570132360 P175/70R13 GOODYEAR DIRECTION TOURING 82T BLK 156 1

We believe that the sales channels should not undergo any changes, nor should the mode of
delivery, which are: point of sale, branch and home delivery.

Integrating Project Stage 2

 ❖ Economic impact

After studying the economic impact on the company, we came to the conclusion
that the reason why we have not had an upturn in sales is because we do not have
enough inventory of the most common and most saleable products, and that the
stock we have should be reconsidered since we have materials with low turnover
and it impacts our cash flow to be able to reinvest.

Below is the inventory we are looking to increase the stock level:

Code Description Existence Sales

LT215/75R14 BRIDGESTONE M773 ALL
020321575140620 TERRAIN 104/101R BLK 8C 198 21
LT31X10.50R15 GOODYEAR WRANGLER
070331105151230 ADVENTURE DURAWALL ALL TERRAIN 109S 151 5
BLK 6C
LT265/75R16 GOODYEAR WRANGLER
070326575162260 ARMORTRAC ALL TERRAIN 119/116R BLK 60 4
8C
070321565162450 P215/65R16 GOODYEAR WRANGLER SUV 98H 22 4
BLK
LT285/65R16 CONTINENTAL VANCONTACT A/S
030328565161180 ALL-SEASON 11 4
131R BLK 10C
P225/45R17 GOODYEAR EAGLE SPORT ALL-
070322545172150 SEASON 94W BLK XL 59 4

The material we are looking to eliminate (material group C) represents a shrinkage

and is non-rotating inventory so we do not segment it as the periodic, seasonal or
perpetual inventory that we have to have. The total cost of inventory shrinkage in
group C is a total of $2,223,050.30. Therefore, this investment represents an
economic impact on the company since the inventory is frozen.
We propose that the investment in this shrinkage be used to increase Group A
inventory.
The following is a detail of the cost of the decrease:

Cost of
Code Description Existence Sales Price shrinkag
e
$ $
LT195/R15 CONTINENTAL
30319580150970 109 1 1,860. 202,798.
CONTIVANCONTACT100 106/104S BLK 8C
54 86
$ $
P245/50R20 GOODYEAR EFFICIENTGRIP SUV
70324550202100 116 1 7,154. 829,940.
102V BLK
66 56
 $ $
P275/50R20 BRIDGESTONE DUELER HL 400 109H
20327550200010 11 1 4,429. 48,728.0
BLK
82 2
$ $
P265/50R20 BRIDGESTONE DUELER HP 92A 107V
20326550200600 19 1 9,937. 188,809.
BLK
34 46
$ $
70317570132170 P175/70R13 GOODYEAR ASSURANCE 82T BLK 190 1 1,342. 255,105.
66 40
$ $
70323545181700 P235/45R18 GOODYEAR EAGLE LS-2 94V BLK OE 164 1 3,105. 509,220.
00 00
$ $
P175/70R13 GOODYEAR DIRECTION TOURING 1
70317570132360 156 1,208. 188,448.
82T BLK
00 00

Total: $2,223,050.30

❖ Determining the root cause of problems or areas for improvement

We consider that one of the main causes of the problems we have is to have stock that does not have rotation and
therefore profits, for which the improvement that is proposed is to promote the inventory in offers, in order to be
able to return the expenditure made in the purchase of them and to be able to invest in the stock of the tires that if
it has rotation, in order to increase the profits in the company and to be able to reinvest so that the profits are
greater.

KPIs are proposed to track ABC inventories to monitor minimum and maximum warehouse levels.
In addition, the following contemplating the demand for orders with the new inventory structure:
➢ Optimum stock: optimum order quantity + minimum stock + safety stock
➢ Loss of stock: (quantity not supplied/ quantity ordered) x 100
➢ Days of inventory: average daily inventory value / (value of goods sold annually/ 365)
➢ Inventory turnover rate: economic value of references sold / average stock value

Ishikawa Cause and Effect diagram is shared with which we visualize the critical problems in the company that
together with the SWOT complements the organizational overview to determine the areas of improvement we have:
● Ishikawa Cause and Effect Diagram
❖ Areas for improvement

With this proposal, we intend to achieve the following objectives:

➢ Maximize warehouse efficiency.
➢ Increase the volume of dispatches.
➢ Decrease average dispatch time.
➢ Increase the level of user satisfaction.

❖ Complementary solutions
No. Identified Alternative solutions
Problems
● Implement procedures to ensure proper warehouse
management.
2 Layout Nonexistent ● Elaborate an optimal Layout.
● Hire the services of a consulting firm
specialized in warehouse management.
● Implement the new MOF for collaborators.
Absence of
4 ● Define new procedures.
Procedures
● Process reengineering.

● Homologation to differentiate different tire brands.

Tire returns
5 ● Standardized procedure for making a return or
exchange.

❖ SWOT
A SWOT of the company is provided contemplating the solutions and areas of improvement that
we have. Based on this model we can observe the optimal solutions for the company:
 STRENGTHS
1. Demand for the product is good.
2. The product is of good quality.
INTERN 3. Mechanized production process.
4. Extensive experience.
5. Customer loyalty.
EXTERNAL
OPPORTUNITIES F-O STRATEGIES
1. Solid position in the market. ● Make the necessary investments for product
2. Companies national y interested in innovation.
the company. ● Propose again the union of the plants.
3. Plant A attempts to negotiate a union with Plant B. ● Perform an analysis of the products that generate
5.- To have the best trained personnel. more than 50% profit for the company.
● Make an alliance with other companies for the
distribution of the product.
● Establish concrete short-term objectives.
THREATS F-A STRATEGIES
1. Entry of new competitors into the sector. ● Develop projects to keep recurring customers
2. Loss of customers. interested in the products.
3. Loss of suppliers. ● Maintain product quality by improving
4. Continue to produce products that are profitable. communication with suppliers.
● To have a production program in place to avoid
overproduction.
WEAKNESSES
1. Problems and discussions between managers and
employees.
2. Customer and supplier confusion.
3. Increase in the cost of inputs
4. The two plants have different objectives.
5. Excessive downtime.
D-O STRATEGIES
● Creation of internal employee rules and regulations
to avoid disputes.
● Organizational reengineering, defining specific
positions and functions for each plant separately.
● Hiring of new employees for plant B, in order to
increase its production and balance with plant A.
● Define specific and general objectives.
D-A STRATEGIES
● Training of current and new personnel for existing
production.
● Improve communication with customers and
provide them with the best service and avoid
confusion.
 Integrating Project Stage 3

V. Generation of improvement proposals

❖ 5.1 Proposal for improvement of the inventory control system The proposal

we consider for the improvement of the project is as follows:

According to the statistics made with previous dates, it is considered to see which are the most sold tires in
that sense, to see which ones we should have in the inventory, and which ones were not sold due to lack of
stock, in order to take into account those that were not sold to consider them in the initial stock at the
moment of rethinking the inventory, so that we will not have sales losses due to lack of inventory.

To rearrange the inventory, it is suggested to redistribute the way in which it is being stored, keeping an
order and location, in this way it will be possible to avoid wasting time in the search for them, implementing
some software which will help us to have a control of where each piece is located, so as not to leave waste
or obsolete tires.

In order to have control of this proposal, it is suggested to implement a logistics technology system. For
example Oracle provides its inventory management system.

This system provides them with complete visibility and control of the flow of goods through an
organization's global supply network, enabling them to optimize inventory, service levels and working
capital, while reducing costs and increasing customer satisfaction.

With this tool you get an overview of the company's operation where you can plot bottlenecks, queued
orders, inventory transactions, shipments and also visualize trends in your inventory.

An example of the view provided by Oracle is the following:

This system is what is proposed in order to improve inventory management in addition to an ERP that is also
offered by Oracle. ERP software that helps plan, budget, forecast and report on an organization's financial
performance. This tool in conjunction with the inventory management software will allow us to migrate to a
platform where access to information is consolidated in one place and we can have data integrity for
subsequent decision making.

❖ VI. Implementation and follow-up

6.1 Evaluation of the effectiveness of the new inventory control model

Taking into account the competitors in the market, making a comparison in success cases, we decided to
propose the solutions provided by Oracle. Among the success stories of the inventory management
software offered by Oracle are: Cisco, Titan, Grupo Bimbo, Cohu, Ana.

The resources currently available to move forward with the proposal are:

● Financial: The scope of the investment is justified to two oracle software "ERP" and "Inventory
Management" as optimized financial resources in shrinkage losses. The shrinkage loss of
$2,223,050.30 for each time period corresponds to a
 potential investment in logistics software to avoid shrinkage.
● Human Capital: We have the people who will have access to these softwares because, given the
role of their activities, they can maintain and develop the tools efficiently.
● Senior management: There is management involvement to provide visibility into the
operation of the company and to justify changes in the operation on a regular basis.
● Infrastructure: There is a volume of computers to implement the Oracle program from systems.
This program is where users (depending on their credentials) will have access to the Inventory
Management and ERP software.

The Inventory Management system we propose provides us with the information to implement the following
KPIs:

● Average Stock = (initial stock + final stock) / 2

● Optimum stock = optimum order quantity + minimum stock + safety stock
● Inventory shrinkage = (stock that should be there - stock that is actually there) / stock that
should be there
● Loss of stock = (quantity not supplied / quantity ordered) x 100
● Inventory days = average daily inventory value / (value of goods sold annually / 365)
● Inventory turnover rate = economic value of references sold / average stock value
● Backorder rate (%) = (number of pending orders / total number of orders) x 100

With the proposed software, the flowcharts before and after implementation are presented:
Formerly Then
 VII. Conclusions and final considerations

Strategic planning is conceived as a long-term action plan. But this does not imply that verification
cannot be carried out as time progresses.

There are companies that only need to carry out a periodic check of their references. However,
others require much more extensive stock management, as they have production processes,
higher product turnover and customer returns (known as reverse logistics). Whatever the case,
inventory control is a key activity to achieve greater profitability.

Inventory control encompasses a set of processes and methods designed to monitor a

company's stock. By knowing in detail all of a company's merchandise, it is possible to better
plan and organize its flows and operations.

Inventory control would include inventory management, which consists of recording the
acquisition and marketing of products. A company must have a minimum stock to provide a
service and must determine its reorder point, which is the time at which the replenishment order
must be placed.

In this way, a balance can be made between the items entering and leaving the warehouse in
order to know their availability. Inventory control requires taking into account fluctuations in
demand, lead time and business operation to define the quantity of products needed to properly
serve the customer.

References
 Avanta Group. (September 20, 2020). Retrieved from https://grupoavante.org/.
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Retrieved November 28, 2021, from https://www.mecalux.es/blog/kpi-inventario
 Perdomo Moreno, Abraham; Administración Financiera de Inventarios Tradicionales y Justo a Tiempo,
Abraham Perdomo Moreno, ed. Pema. Mexico;2001
 García Cantú, Alfonso; Almacenes, Planeación, Organización y Control, , ed. Trillas; Mexico; 2010
 Del Río González, Cristóbal; Acquisiciones y Abastecimientos, , ed. Ecafsa; Mexico; 2010
 Oracle Mexico. (s. f.-c). Definition of enterprise resource planning (ERP). Retrieved December 12, 2021,
from https://www.oracle.com/mx/erp/what-is-erp/
 Oracle Mexico. (s. f.-e). Oracle Inventory Management. Retrieved December 12, 2021, from
https://www.oracle.com/mx/scm/inventory-management/
 M. (2021b, September 10). 10 inventory KPIs you should monitor in your warehouse. Mecalux. Retrieved
December 12, 2021, fromhttps://www.mecalux.es/blog/kpi-inventario