Material Inventory Optimization in Bakery Supply Chain: Implications for Food Security in Nigeria

Document Type: Research Paper

Author

Department of Mechanical Engineering, University of Nigeria, Nsukka, Nigeria

Abstract

The study determined optimum inventory levels for various bakery resources using the bread supply chain network in Onitsha City. Structured questionnaires were administered among bakery factories. The optimum design achieved through the optimization model was compared with the existing systems. Analysis of 90 bakeries with a combined capacity of 3960 revealed that total money N 564,408,477.28 is spent on energy annually. Of this amount, 66.75% is expended annually to meet diesel requirements, while firewood and petrol account for 22.57% and 10.66%, respectively. The results of the ABC analysis show that flour ranks as class A with over 78%, followed by sugar at 13%, whilst the remainder of the ingredients constitutes 9%. High operating costs was identified as a major factor militating against the growth of the sector. Consequently, baked bread is expensive and remuneration is very poor, making the industry less attractive. The implementation of optimization practice adds value leading to savings amounting to N 6,957.51, thus enhancing the supply chain competiveness. The annual supply chain performance measured by inventory turnover shows a frequency of 73 inventory turns. Since the bakeries contribute to ensuring food security, these findings, if implemented, will assuage the rising food insecurity in the nation.

Keywords

Main Subjects


Braucer, D. C. , G. Naadimuthu (1990). A goal programming model for aggregate inventory and distribution planning. Mathl. Comput. Modelling, Pergamon press, Vol. 14, pp. 1085-1090.

Carson, Y., A. Maria (1997). Simulation optimization: methods and applications. Proceedings (S. Andradottir, K. J. Healy,

D. H. Withers and B. L. Nelson ed.) of the 1997 Simulation Conference, pp. 118-125. Available www.informs-sim.org/wsc97papers/0118.pdf (accessed 15/10/2013).

Cole, G. A. (1993). Management Theory and Practice. DP Publications Limited, 4th Edition, London, pp. 208-209.

Ekechukwu, O. V., S. C. Nwanya, A. C. Madu, J. C. Agunwamba (2011), Optimization of Energy and Manpower Requirement in Nigerian Bakeries. Energy Conversion and Management, Vol. 52, pp. 564- 568.

Elwany, H., M. Shouman, M. Abou-Ali (2013). Production scheduling techniques- a review. Available at www.staff.zu.edu.eg/drshouman/userdownloads/paper (accessed 15/10/2013).

Everett, E. A., J. E. Ronald (2000). Production and Operations Management: concepts, models and behavior, 5th Edition, Prentice-Hall, India.

He, H., R. Hoseney (1991). Gas retention of different cereal flours. Cereal Chemistry, Vol. 68 (4), pp. 334–336.

Heizer, J., B. Render (2009). Operations Management. Pearson Prentice Hall (Flexible Version), 9th Edition New Jersey 07458, pp. 362–380.

Kim, J.C., D. De Ruiter (1968). Bread from non- wheat flours. Food Technology, Vol 22, pp. 867- 878.

Koteeswaran, G. P., E. Shayan, R. Rajabpour (2004). Buffer estimation in a mixed-model assembly line.Proceedings of the fifth Asian Pacific Industrial Engineering and Management Systems(APIEMS)conference,pp. 14.5.1-14.5.12.Available www.apiems.net/archive/2004_14.5pdf (accessed 15/10/2013).

Lin, J. S., J. J. R. Ou (2011). A study on supply chain value-added logistics based on the great Chinese market. International Journal of Electronic Business Management, Vol. 9(1), pp. 58-69.

Madu, A. C. (2006), Optimization of energy, manpower and inventory requirement for the bakery industry in Nigeria. M. Eng. Degree project report submitted School of Postgraduate Studies, University of Nigeria, Nsukka.

Nwanya, S. C., A. C. Madu (2013), Inventory Optimization of Bakery Supply Chain for Food Security in Nigeria. International conference of the Nigerian Institute of Industrial Engineers: Industrial Engineering and National Transformation, November 13 – 15, 2013, Owerri, Nigeria.

Nwanya, S. C., R. Taccani, M. Reini (2009), Absorption Refrigeration for Sustainable Food Security in Remote Areas of Nigeria. [Online] available from http://www.rmrdctechnoexpo.org/.../Absorption%20Refrigeration%20sust

Okolie, P. C., E. C. Okafor, E. C. Chinwuko (2010). Optimal production mix for bread industries: a case study of selected bakery industries in eastern Nigeria. Journal of Engineering and Applied Sciences, Vol. 5 (6), 403- 412. Available at www.academia.edu/1376650/optimal (accessed 14/10/2013).

Onwumere, J., A. C. Nwosu, J. A. Nmesirionye (2012). Assessment of the effects of external capital mobilization on the equipment investment of bakery enterprises in South Eastern Nigeria. Int. Journal of Economics and management sciences, Vol. 1 (9), pp. 83-89.

Oyeku, O. M., C.F. Kupoluyi, A.A. Osibanjo, C.U. Orji, F.N. Ajuebor, I.O. Ajiboshin, W.B. Asiru (2008). An Economic Assessment of Commercial Production of 10% Cassava-Wheat Composite Flour Bread. Journal of Industrial Research and Technology Vol. 2 (1), pp. 13-20. Available www.fiiro.org/jdownloads/Published%20Journals/fiiro_jirt03_13-20.pdf (accessed 12/11/2015).

Payne, A. C., J. C. Chelsom, L. R. P. Reavill (1996). Management for Engineers. John Wiley Publishers, New York, pp. 409–430.

Ruteri, J. M., Q. Xu (2009). Supply chain management and challenges facing the food industry sector in Tanzania. International Journal of Business and Management, Vol. 4(12), pp. 70–80.

Vutete, C., N. Bobo (2015). The impact of bakery industry supply chain on the pricing of bread in Zimbabwe. Greener Journal of Business and Management Studies, Vol. 5(1), pp. 1-15.