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