Optimisation of MRP parameters for printed components at UCB Pharma (Braine l’Alleud site): Analysing ways to improve lot size and safety stock approaches under constraints

Details

Supervisors

Foret, Marc

Faculty

Louvain School of Management

Degree label

Master [120] : ingénieur de gestion, à finalité spécialisée

Abstract

UCB Pharma, a global biopharmaceutical company, identified inefficiencies in stock management of printed packaging components which face numerous constraints, resulting in sub-optimum inventory policies, operational difficulties, and increased scrap rate. Recognising the direct impact of inventory control on scrap quantity, it is essential to analyse and reassess the MRP parameters, specifically lot size and safety stock. An analysis is conducted to evaluate the impact of using the Economic Order Quantity (EOQ) method to determine lot sizes, aiming to optimise holding and ordering costs while considering the scrap dimension. The safety stock method also requires enhancement to address all associated risks. To meet UCB's requirements and address supplier variability, a safety stock constraint is established. The implementation of the EOQ method significantly reduced ordering and holding costs. However, while the scrap rate remained stable, further managerial improvements are necessary. Since proposing new lot sizes requires additional pallet space, a capacity constraint must be added to the lot-sizing method. As well as incorporating analytical improvements and proposing managerial improvements to optimise inventory control, next steps for further enhancements are suggested to continue progressing towards optimal inventory management.