Today many companies face problems with inventory management. The importance of adequate inventory management has become more evident, while organizations try to reduce their costs and increase their service level.

This master thesis was conducted at VSM Group AB in Huskvarna, which is a manufacturer that produces and delivers sewing machines to a worldwide market. VSM Group AB has problems with the management and the refilling of the work-in-process (WIP) inventories and also with lack of information about component balance and location in the production and material planning system.

Therefore, the purpose of the thesis was to improve the control of the WIP inventories and the information about the components in the production and material planning system. In order to achieve the purpose, interviews and observations were performed, theories in inventory management were reviewed and the production process was studied.

Afterwards solutions for improvements were proposed. To solve the management and refilling problem, a kanban ordering system was proposed, which would use kanban cards to order components from the storages to the WIP inventories. To develop the component information displayed in the production and material planning system, an additional feature was proposed to the system. So instead of showing one inventory balance for each component, the system would display balances for three different places in the factory: the goods arrival and quality control area, the storage and the production.

The proposed solutions can provide several benefits to the company. The kanban ordering system can increase the material handlers’ efficiency, set a standard refilling quantity and be a tool for reducing the WIP inventory levels. The more detailed information in the production and material planning system can improve the decision making for the purchasers and planners and give the ability to measure the flow and level of material inside the factory.

These solutions will provide a more appropriate inventory management to the company, with better control of the components and improved information quality.