Best Practices of Inventory Management Under Uncertain Demand for Fast Moving Consumer Goods (FMCG)
Open Access
- Author:
- Luo, Jiaqi
- Area of Honors:
- Supply Chain and Information Systems
- Degree:
- Bachelor of Science
- Document Type:
- Thesis
- Thesis Supervisors:
- Robert Alexander Novack, Thesis Supervisor
John C Spychalski, Thesis Honors Advisor - Keywords:
- Fast Moving Consumer Goods
FMCG
inventory management
uncertain demand
volatile demand
best practices
supply chain management - Abstract:
- This research addresses the question of optimal inventory management practices for Fast Moving Consumer Goods (FMCG) companies under uncertain demand, particularly in the personal care category. Employing a qualitative methodology, in-depth interviews with FMCG executives were conducted to understand the challenges and identify solutions for managing inventory during high uncertainty. The findings revealed three key components for effective inventory management: cross-functional teamwork, technology implementation, and agile supply chain practices. Cross-functional teamwork facilitates better coordination and decision-making within organizations. Advanced technologies, including automated forecasting, RFID, smart warehousing, AI, and ML, improve demand forecasting accuracy and real-time inventory visibility. Agile supply chain practices allow FMCG companies to quickly respond to market changes and customer needs, minimizing stockouts and overstocking while optimizing inventory levels. In summary, successful inventory management under volatile demand in the FMCG industry requires integrating cross-functional teamwork, advanced technology, and agile supply chain practices. Supported by investments in workforce development, data infrastructure, and collaboration between supply chain practitioners, data scientists, and IT professionals, these strategies can enhance customer satisfaction, cost savings, and overall business success.