From IIE staff reports
This blog includes an interview with Patrick Gathof from the Milwaukee School of Engineering, winner of the IIE Undergraduate Student Technical Paper Competition. He was recognized at the IIE Annual Conference & Expo 2014 for his paper, “Supermarket Redesign: Demand-driven Inventory Planning.”
IIE: Tell me about your winning paper and its research focus.
Gathof: The paper was created from my senior design project that I worked on with fellow classmates Matthew Waech and Jonathan Paulino. Here is the paper abstract:
This senior design project report examines the use of a forecasting model to predict customer demand, leading to informed inventory planning decisions.
The goal of the project was to develop a forecasting model to allow Benz Oil to better predict customer demand, as well as use the forecasted demand to develop inventory planning strategies. An additional goal of the project was to reorganize the raw materials in the facility to minimize travel distance and decrease the non-value-added time for the employees.
The project team developed a forecasting model in Excel that projects customer demand three months into the future. With the use of the model, the team analyzed three potential inventory planning strategies: Economic Order Quantity (EOQ), Kanban, and Safety Stock. The implementation of the EOQ strategy would decrease annual inventory costs by $1,051,739 and would yield a 1-year return on investment (ROI) of 277%.
The team used ABC, From-To, and Spaghetti Diagram analyses to determine the locations for raw materials that would decrease annual walking distance by 89.4 miles for the employees. This equates to an annual net savings of $133 with a 1-year ROI of 24%.
The team also developed a map of the raw materials that could be used by Benz Oil to eliminate the need to memorize the various locations. The implementation of the map would yield a net annual savings of $920 due to a decrease in training time, which would yield a 1-year ROI of 160%.
Who or what guided you to this paper topic?
For our senior design project, our advisors gave all of the students a list of companies and each of their respective projects. Benz Oil was the only project that seemed open ended. I was not excited about the other projects that had a narrow focus or those which seemed to already have the project figured out so-to-speak. Benz Oil said: our company has a variety of low hanging fruit within the facility, we would like a team to come in, find that low-hanging fruit, and make improvements that they deem as necessary or important.
The company provided the team with feedback regarding which of the several areas of improvement presented would be of most interest to their employees. After this feedback was received from the client, the team presented this feedback to their advisors, and it was suggested that the team use this project as an opportunity to try and pitch a brand new idea to the client. With this in mind, all of the issues were taken into consideration and prioritized by using a weighted factors table which included factors such as client interest, client impact, as well as team member knowledge of the problem. This weighted analysis was used to assist the team in determining the areas of improvement to be addressed for this senior design project.
Using the results of the weighted factors table, the team narrowed the scope such that it would provide an optimal effect on the company at this current time. The team’s focus turned to the issues regarding the locations and organization of both the raw materials and the finished goods. Along with the focus on the location of materials, the team also attended to the outdated documentation of the facility layout; this combination allowed for improved control of the storage of the materials throughout the Benz Oil facility. Additionally, the team took the advisors’ advice and moved forward with developing a formal forecasting model for customer demand and creating stock levels for the finished goods.
Is this your first research paper to be published or recognized?
Yes it is. I have of course done multiple projects and papers for other organizations, classes, and projects, but nothing to this extent.
How do you feel working on this research paper prepare you for your future career in industrial engineering? What lessons did you learn in respect to how you went about your fact-finding and writing?
Working on this research paper will help prepare me for working with unknown clients, and working the challenges of different cultures and mindsets that various groups can bring. One of the hardest parts of the project was trying to convince the client to do something that they really did not want to do. It was exciting to show the true monetary value of executing such deliverables.
Outside of receiving your award, what did you enjoy most about the IIE Annual Conference in Montreal?
I truly enjoyed participating in the Industrial Advisory Board Track, in Applied Solutions. It was fun to listen to the various problems people have been facing and also hearing about how they came to a solution. I enjoyed getting resume and interview tips from professionals, and I enjoyed connecting with professionals from all over the world. This was truly an invaluable experience.