Monday, November 10, 2014

Inventory Management in local NGOs - the Food Bank

Last weekend, I volunteered with the Food Bank. The Students Activities Committee of my college had organized this trip to the outskirt area of Pittsburgh. When our bus finally arrived on the site, my fellow students and I were explained the task for the day. We were asked to put various kinds of food into boxes of different sizes. Before doing so, however, we had to check expiration dates (we were provided a list that told us which date was still considered acceptable for each product category) and the required weight of each package. The filled boxes were taped, labelled, and manually placed on a pallet. Our supervisor then, from time to time, got behind the wheel of a forklift, picked the respective pallet up and drove away.

There was no single bar code in sight, and I wondered how people working in the warehouse were actually able to keep track of the inventory.

After a little bit of research, I came across an interesting case study dated November 2005. It deals with inventory management in the Food Bank of New York. Apparently, the Food Bank there had used a paper-based tracking system and, when adjustments had to be made, a financial software package. As a consequence, problems (loose sheets often got lost, there were inaccuracies in the data due to the manual form of input, the location of products was not easy to determine, etc.) occurred - the system was not customized for the needs of the Food Banks' operations. 

To tackle this issue, the Food Bank in New York thought of introducing a new form inventory management which would make life easier for its employees - and lead to more efficiency: 
  • Less data would have to be managed manually, giving employers more time to focus on their core tasks (dispatch etc.)
  • Less time would be lost due to product search (when its location was not clear), again providing employers with more time for their core tasks
  • Data would be accurate and therefore reliable
  • Communication between divisions within the warehouse would be improved, as everybody would have access to the same sets of information and data
In the end, the NY Food Bank purchased a Warehouse Management System from North Branch, Control Solutions Inc. (CSI). The implementation process took nine months, and minor issues (like compatibility with other devices used in the warehouse, e.g. tablets) could be quickly solved together with CSI. The system immediately showed great effect: in the first year after its implementation, over six million pounds of food more than in the year before could be distributed. 

Now, how does the system actually work? The main feature is - and this comes back to what I had figured was missing at the Food Bank in Pittsburgh - the bar code. 
Every product / box in the NY Food Bank is labeled with such a code, which makes the feeding of data into the system a simple and time-saving scan process.

When I volunteered, I asked one staff member at the Food Bank where the food was actually brought to, i.e. how the food reached the needy people. I learnt that the Food Bank in Pittsburgh distinguishes between two different forms of distribution:
  1. Produce to People, Food Bank’s large-scale produce distribution program. There are 17 distributions each month in 17 different locations. 
  2. Distribution of food by smaller local NGOs. The Food Bank Pittsburgh cooperates with more than 400 of them. 
In particular for the local NGOs that hand out the food, accurate data in the Food Bank database is important. If the data were incorrect and products did either not show up or were marked as unavailable although they would be physically available, some of the products would never be distributed or would be missing at the local food pantries. A good inventory management in the warehouse does therefore not only benefit the employers at the Food Bank, but also the other 400 NGOs in the area as well as the people who urgently need the food.

As I have now read the case study, I do have the feeling that I have to go to the Food Bank in Pittsburgh again (then for the third time) in order to convince myself that I just missed the bar codes on the packages. From what I can tell, however, the local Food Bank here might have to consider a paperless form of inventory management as it still seems to be operating without the help of technology.

Another question I would be interested in: how can the Food Bank plan and forecast its inventory accurately? And for which period of time is this being done? While in profit-oriented companies there might be a specific reorder point (e.g., if the number of product x drops below 200, a specified amount will automatically be reordered) if they use the continuous review model or, 
if they use the periodic review model instead, they would reorder (based on the number of product x that has not been sold up to that point) within a particular time frame 
(e.g., if company y verifies the number of product x always on Tuesdays and replenishes according to the results of that single inventory check per week), 
the Food Bank can only estimate the number of products it will receive. Different from "other" wholesales, the Food Bank does not order the products but gladly accepts the products that are donated by individuals as well as companies (like Giant Eagle). 

As soon as I have answers to these questions, this blog will be updated. So - stay tuned and donate to your local food bank in the meantime!


The Case Study mentioned in the blog can be found here:


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