Year of Graduation
Management of defective raw materials return flow on the example of FMCG company
Faculty of Logistics
In his thesis the features and problems of defective materials return flow management were considered. The requirements to the products quality are increasing nowadays. High quality of raw materials used in production is capable to provide the maximum satisfaction of consumers' requirements and to ensure an effective process of finished goods production. Unfortunately, daily companies face the problem of defective products delivery, which reduces the efficiency of the entire supply chain. The problem is often underestimated by managers and still very poorly understood by the scientific environment despite its high significance. Causes of defective raw materials return flow as well as bottlenecks in the management of this flaw were identified in his thesis. Based on the analysis of return flow of FMCG company three main problems were identified: delivery of defective raw materials, disruption of production processes, inefficient return process. Each issue is caused by individual set of reasons which can be liquidated by different methods. The reduction of incoming defective products amount is possible owing to the revision of the supplier choice criteria and the implementation of sanctions stated in the contract. The production downtime can be reduced as a result of cooperation with more reliable suppliers. To eliminate the problems caused by the inefficient process of defective raw materials return it is necessary to allocate the guilty party. If problems are caused by the supplier, it is necessary to strictly comply with the sanctions prescribed by the contract. To improve the effectiveness of defective raw materials return process within the company the reengineering of process was held, as well as the interaction processes of related departments` employees were standardized. The application of all the above methods allows reduce the number of incoming defective raw materials, inventory levels, the cost of immobilized assets in inventory and production costs. Ultimately, the efficiency of the use of own capitals increases.