Reducing Inventory Levels in a Supermarket by the Six Sigma Method

Abstract

One of the most active sectors in an increasingly globalized world, retail sector has become a rapidly developing sector in Turkey as well. Companies in this sector must follow an inventory policy that provides them with minimum cost and maximum profit in order to compete and survive in market. For this reason, effective management of inventory is crucially important in the retail sector, as in other sectors. In this study, Six Sigma method was used in order to reduce the inventory levels in a large supermarket operating both wholesale and retail in Turkey. Six Sigma is a management tool that emphasizes continuous improvement as a culture and increases the efficiency of processes. In this study, the causes of high inventory levels were determined by following the steps of the Six Sigma method, and the collected data were analyzed. At the end of the implementation, some improvement actions were planned to reduce inventory levels, and a monitoring system was established to ensure sustainability. There was a deficiency in inventory tracking and demand forecasting processes. The main reason for this was seen to be the purchasing organization. It was determined that sometimes more than necessary purchases were made. Six sigma studies on supermarkets in Turkey are limited. This study sets an example for the use of the Six Sigma method, which is a systematic process improvement method for the retail industry.