Part III Information for Inventory Management
|
|
- Georgiana Cain
- 8 years ago
- Views:
Transcription
1 Part III Information for Inventory Management Chapter 6 Sources of Information 1
2 Aims of the Chapter After reading this chapter you should be able to do the following: discuss the information needed for inventory management; outline the design of an inventory management information system; consider the information supplied by accounting; do an ABC analysis of stock; describe the function of procurement and its role in inventory management; outline the impact of e-commerce; discuss the role of warehousing; describe important factors in the design of a warehouse. Systems: Types of Information Inventory managers need a huge amount of information: the items, their specification and use, business plans and strategies, suppliers, customers, promotions, storage requirements, constraints, prevailing conditions of trade, contract law, transport arrangements, competitors, Business environment, changing conditions, international trade, special requirements, and so on. This information is collected from many sources, and is presented by the organization s management information system (MIS). 2
3 Systems (MIS) The MIS controls the flow of information throughout an organization, and makes sure that everyone has the information they need to work properly. It collects, checks, organizes, stores, analyses and presents information in the most appropriate formats to everyone who needs it. Sometimes it is convenient to refer to an inventory management information system which consists of all the parts of an MIS that are specifically concerned with inventory management. This collects information from both within the organization and from external sources and presents it to inventory managers. Systems: Types of Information Business environment, which gives the overall context for stocks: the state of competition, changing circumstances, likely shortages or supply difficulties, state of the economy, government policies and legislation, inflation, exchange rates, tariffs, duties, taxes and quotas, and a range of other external factors that might affect stocks. Organizational strategies, which are the internal policies that show what the organization is doing in the long term and the support needed from inventory management: details of objectives, planned operations and products, priorities, financing arrangements, trading relationship, and a range of other internal factors that might affect stocks. 3
4 Systems: Types of Information Performance targets, which identify the factors that are important to the organization and consequently to inventory management and the levels of performance to be achieved: aims for customer service, productivity, stock turnover, return on inventory investment, overall investment in stock, improvements, balance between competing objectives, etc. Plans for operations and production. material requirements, new products, changes to existing products, promotions, size of demands, etc. Systems: Types of Information Costs. Our independent demand inventory models are based on reliable figures for the four cost components of unit, reordering, holding and shortage. Managers need detailed breakdowns of other relevant costs, such as opportunity costs, financial charges, transport, storage, packaging, handling, insurance, obsolescence, internal movement, delays, distribution, etc. 4
5 Systems: Types of Information Customer information. Inventory managers pass materials to customers (either internal or external). alliances, trading arrangements, identification of existing and new customers, contact details, salespeople used, locations, products demanded, size of orders, regular orders, preferred delivery modes, purchases from competitors, sensitivity to prices, returns, complaints, attitude towards shortages, back-orders, service level and lead times demanded, stocks held, purchasing system used, attitudes towards shared systems and integration, trading history, payment method, financial security, credit terms requested, etc. Systems: Types of Information Demand patterns. To have enough stock to meet likely patterns of future demand, we need forecasts for each period, complete histories of past demand, changing patterns over time, reasons for changes, amount of variation and uncertainty, factors that affect demand, special promotions and marketing campaigns, regular orders, advance sales, etc. Supplier information, which gives all relevant information about the supply of materials, including preferred suppliers, alliances and other trading arrangements, attitude towards shared systems and integration, locations, products supplied, quality, purchasing system used, lead times, reliability, trading history, financial security, alternative suppliers, process and purchase conditions, credit terms offered, attitude towards returns, payment method, etc. 5
6 Systems: Types of Information Product details, which identify the exact item and include identification codes, description, design features and specifications, limitations, unit prices, discounts available, special conditions for storage or supply, quality available, weight and size, packaging, available suppliers, order restrictions, relative make/buy costs, and alternative products. Warehousing information, which shows where stocks are held, including locations, stock levels in each location, space available, facilities and conditions, material handling equipment, security, ownership, restricted access, costs and performance. Systems: Types of Information Transport, including the types of transport available, types of vehicle, special requirements and facilities, access, speed of delivery, scheduled services and frequency, reliability, costs, capacities, back-hauls and reverse logistics. Stock information. This gives the details of all current stocks held: identification codes, current holdings, locations, inventory policies, reorder levels and quantities, deliveries due, suppliers, quality, costs, units reserved for known orders, allowed variation in stock, maximum and minimum levels, age of units, obsolescent and slow moving items, insurance, special conditions, allocation of stocks to orders, back-orders, etc. 6
7 Systems: Types of Information Orders outstanding, which are all the orders with deliveries expected in the near future, details of materials in transit (coming from suppliers, going to customers, or moving between facilities), routes, transport operators, current locations, quantities, due dates, reliability, special handling required, potential difficulties, back-orders, urgent deliveries, etc. Systems: Types of Information Orders outstanding, which are all the orders with deliveries expected in the near future, details of materials in transit (coming from suppliers, going to customers, or moving between facilities), routes, transport operators, current locations, quantities, due dates, reliability, special handling required, potential difficulties, back-orders, urgent deliveries, etc. 7
8 Systems: Types of Information Systems: Transaction Recording Inventory MIS has to track every detail of stock movement, from orders sent to suppliers, through to payments received, for finished products delivered to customers. A typical transaction recording system might do the following: maintain accurate records of current stocks, customers, suppliers, etc.; update these records after each order, delivery, withdrawal or other transaction; check and validate all data used by the system. 8
9 Systems: Transaction Recording Systems: Transaction Recording The information can be passed to the inventory control system, for example, to do the following: calculate variables, including forecasts of demand and lead time, reorder levels, order quantities, costs, etc.; prepare and transmit orders when stocks fall to reorder levels; monitor order progress, with follow-up and expediting of overdue orders; check orders, credit and payment facilities of customers; check deliveries, clear of invoices from suppliers and arrange payment; report exceptional circumstances that need management attention; summarize data in management reports; update all parameters used by the system. 9
10 Systems: Transaction Recording The information flow through an organization is usually separated from the material flow. The two are obviously connected, but managers have to control operations and check that the transactions reported actually happen. One facet of these checks are periodic, manual counts of stock called stocktaking to find differences between recorded and actual stock levels. Systems: Transaction Recording There are several reasons why actual stock may differ from recorded stock: records may not have been updated with recent transactions; stock is mislaid (particularly when an item is kept in several locations) and will turn up later; emergency or hurried withdrawals from stock may incur errors or not be recorded; deliveries or withdrawals are recorded more than once by mistake; cancelled orders or withdrawals are not recorded; poor quality and returned items (either from customers or to suppliers) are not recorded; stock become obsolete and is discarded; stock is stolen, damaged or deteriorates while in store. 10
11 Systems: Transaction Recording There are several ways of encouraging this, and perhaps the most important is to restrict access to stores. Since stocktaking is an expensive and inconvenient, some only do one check at the end of the financial year. A more useful approach uses cycle-counting, where stock is checked at regular intervals. Typically, a small proportion of items is checked every week, with high usage items checked every month and less widely used items every three months. Checks may be triggered by specific conditions such as a reported discrepancy in stock, an item with zero or low stock, an item with very high stock, a back-order placed for an item that is recorded as being in stock, or a period with no recorded demand. One common suggestion is that important items should have discrepancies of less than 0.2% in stock levels, others 1%. Information from Accounting Accountants supply data about the four cost components unit, reorder, holding and shortage costs. They also provide more detailed costs information and a lot of transactional data. This information appears in records of individual transactions, and is also summarized in the organization s accounts. Gross profit = net sales revenue cost of products sold Cost of products sold = opening stock + net purchases closing stock 11
12 Information from Accounting Opening stock 2, Sales 22, Purchases 13, less returns Less returns Net sales 21, Net purchases 12, Total stock 15, Less closing stock 3, Cost of products sold 12, Gross Profit 9, , , Information from Accounting Raw materals Opening stock of raw materials $ 60,000 Purchase $ 225,000 returns and allowances $ 10,500 purchase discount $ 4,500 $ 15,000 Net purchase $ 210,000 Inward transport $ 15,000 Cost of material purchased $ 225,000 Cost of material available $ 285,000 Closing stock of raw materials $ 105,000 Cost of raw material used $ 180,000 12
13 Information from Accounting Work in progress Raw materals used $ 180,000 Staff $ 390,000 Overheads $ 125,000 Total cost of operations $ 695,000 Opening stock of work in progress $ 45,000 Total work in progress $ 740,000 Closing stock of work in progress $ 75,000 Total cost of production $ 665,000 Finished goods Opening stock of finished goods $ 135,000 Cost of production $ 665,000 Products available for sale $ 800,000 Closing stock of finished goods $ 180,000 Total cost of products sold $ 620,000 Information from Accounting: Value of Stock An obvious problem with accounting information is that it depends on the conventions used. The usual practice is to value stock at the lesser of unit cost or realizable value. Value of stock = number of units in stock unit value We can avoid the problem of variable stock levels by counting the number of units held at a specific time, usually the end of the financial year. If there are enough items in the stock, this gives a reasonable overall average (providing the demands for items are more or less independent, and do not all follow the same strongly seasonal variation). 13
14 Information from Accounting: Value of Stock The other problem is variable unit cost. There are four main options for dealing with this: Actual cost identifies each unit in stock with the price actually paid for it. First-In-First-Out (FIFO) This assumes that the first units arriving in stock are the first sold, so the value of remaining stock is set by the amount paid for the last units bought. Last-In-First-Out (LIFO) assumes that the latest units added to stock are used first, so the value of remaining stock is set by the amount paid for the earliest units bought. Weighted average cost finds the average unit cost over a typical period from: Average cost = Total cost of units Number of units bought Information from Accounting: Value of Stock The method chosen should give the fairest match of costs to revenues. FIFO is the most widely used method, while LIFO is often expressly prohibited, especially when it would artificially reduce tax liabilities. Another consideration is that accounting conventions should be consistent, so that organizations should not look for a short-term gain by changing the basis of calculations. 14
15 Worked Example #1 During her first job on a graduate trainee scheme, Madeleine Fraser was given the following record of transactions for an item and asked for her views on the profit. What answer could she give? Date Purchases number Unit cost ( ) Sales number Unit price ( ) Opening stock January February March April May June Worked Example #1 Date Purchases number Unit cost Sales number Unit price Inventory Stock Value (FIFO) Stock Value (LIFO) Opening stock , , January , , February March , , April Stock Value (Wt. Avg.) May , , June , , , Total Total Cost 6, Wt. Avg Revenue 5, Cost of products 3, , , Gross Profit 2, , ,
16 Information from Accounting: Value of Stock It is often expensive, difficult or impossible to count the actual number of units in stock. We can estimate the value of stock without actually counting it, by using the gross profit as a percentage of sales. If we assume this remains constant from one period to the next, we can work backwards to estimate the value of closing stocks. There are variations on this approach for estimating the value of closing stock, but they all rely on conventions and assumptions and are clearly less reliable than methods based on actual stock counts. Information from Accounting: Value of Stock It is often expensive, difficult or impossible to count the actual number of units in stock. We can estimate the value of stock without actually counting it, by using the gross profit as a percentage of sales. If we assume this remains constant from one period to the next, we can work backwards to estimate the value of closing stocks. There are variations on this approach for estimating the value of closing stock, but they all rely on conventions and assumptions and are clearly less reliable than methods based on actual stock counts. 16
17 Worked Example #2 Last year PiHo Industries made a gross profit of 30% of sales. This year they know that the opening stock of an item was $8,000 with purchases of $22,000. If sales of the item were $40,000, what is the value of closing stock? Sales $ 40,000 Cost of products sold: Opening stock $ 8,000 Purchases $ 22,000 Cost of products available $ 30,000 Estimated closing stock??? Total cost of products sold $ 28,000 Gross Profit $ 12,000 Estimated closing stock = 30,000 28,000 = $2,000 Information from Accounting: ABC Analysis of Stocks The origin of the ABC analysis ( Pareto analysis, or the rule of ) came in the nineteenth century when Vilfredo Pareto found that 20% of the population owned 80% of the wealth. In inventory control terms it means that 20% of the inventory items need 80% of the attention, while the remaining 80% of items need 20% of the attention. In particular, ABC analyses define the following: A items are the few most expensive ones that need special care. B items are ordinary ones that need standard care. C items are the large number of cheap items that need little care. 17
18 Information from Accounting: ABC Analysis of Stocks Typically an organization might use an automated system to deal with all B items. A items are more important, and although the automated system might make some suggestions, managers make the final decisions after a thorough review of circumstances. C items are very cheap and are usually left out of the automatic system, to be dealt with by ad hoc procedures. An ABC analysis starts by taking each item and multiplying the number of units used in a year by the unit cost. This gives the total annual use of items in terms of value. Usually, a few expensive items account for a lot of use, while many cheap ones account for little use. If we list the items in order of decreasing annual use by value, A items are at the top of the list and C items are at the bottom. Information from Accounting: ABC Analysis of Stocks Because an item is cheap or has low demand, it does not mean that it is not important. organizations need stocks of all items including those that are cheap or not often used to continue their smooth operations. They typically hold C items in stock because they: are more important than their classification suggests like spare parts; allow continued sales of an old item which may no longer be made; Are associated with sales of some A items; give high profits in relation to their low costs; are new items which have not yet established a history of use; are expected by customers like ink cartridges for old printers. 18
19 Information from Accounting: ABC Analysis of Stocks If the three categories are not descriptive enough, managers might add extra ones. A fourth category is sometimes used, where D items are used so infrequently they are dead and are being considered for withdrawal. And sometimes a special category is used for important spare parts or other items that have a combination of high importance and low use. Information from Accounting: ABC Analysis of Stocks Category % of items Cum. % % of use Cum.% A B C
20 Worked Example #3 A small store with 10 categories of item has the following costs and annual demands: Item X1 Y7 W4 X2 X3 Y9 W5 Z3 Z4 X4 Unit Cost Weekly demand Do an ABC analysis of these items. How might stocks of each category be controlled? Item X2 Y9 Y7 X3 Z4 X4 Z3 X1 W5 W4 Cum. Item # Cum. Item % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Unit Cost Weekly demand Weekly use Cum. Use Cum. Use in % 52% 73% 84% 88% 92% 95% 97% 98% 99% 100% Category A B B C C C C C C C Information about Supply and Demand: Demand Forecasting The pattern of demand is perhaps the most important single factor for inventory management. In general, there are two sources for demand data. For the first, an organization supplies products directly to customers and has historical sales figures that it can use to forecast future demand. (Chapter 7) For the second, an organization supplies materials to support internal operations and can use the planned operations to give a timetable for demands. (Chapters 8 and 9). 20
21 Information about Supply and Demand: Supply and Procurement Procurement is responsible for acquiring all the materials needed by an organization. It consists of all the related activities needed to get materials, services and any other materials from suppliers into an organization. The overall aim of procurement is to guarantee a reliable supply of materials to an organization. Information about Supply and Demand: Supply and Procurement working closely with user departments, developing relationships and understanding their needs; finding good suppliers, working closely with them and developing beneficial relationships; buying the right materials and making sure that they have acceptable quality, arrive at the time and place needed, and meet any other requirements; negotiating good prices and conditions; keeping stocks low, considering inventory policies, investment, standard and readily available materials, etc.; moving materials quickly through the supply chain, expediting deliveries when necessary; keeping abreast of conditions, including pending price rises, scarcities, new products, etc. 21
22 Worked Example #2 Last year Lavender Spartak Limited had total sales of $216 million. Their direct costs were $116 million for materials, $54 million for employees and $24 million for overheads. What is the effect of reducing the cost of materials by 1%? in Millions$ Original Cost reduced by 1% Change Total sales $ $ Direct cost $ $ % Employees $ $ Overhead $ $ Total cost $ $ Gross profit $ $ % Information about Supply and Demand: Procedure for Procurement Procurement looks for two factors: materials that satisfy their requirements; and a supplier who can guarantee to deliver the agreed materials. A useful approach for choosing the best supplier has the following steps. Look for alternative suppliers and build a long list of qualified suppliers who can deliver the materials. Compare organizations on this long list and eliminate those who are, for any reason, less desirable. Continue eliminating organizations until you have a shortlist of four or five of the most promising suppliers. Prepare an enquiry, or request for quotation, and send it to the shortlist. ž Collect the bids returned by the shortlist, do a preliminary evaluation, and eliminate those with major problems. ž Do a technical evaluation to see if the materials meet all specifications. ž Do a commercial evaluation to compare the costs and other conditions. 22
23 Information about Supply and Demand: Procedure for Procurement Collect the bids returned by the shortlist, do a preliminary evaluation, and eliminate those with major problems. Do a technical evaluation to see if the materials meet all specifications. Do a commercial evaluation to compare the costs and other conditions. Arrange a pre-award meeting to discuss bids with the remaining suppliers. At this point you should have enough information to make a final choice of supplier, so arrange a pre-commitment meeting to sort-out any last minute details. Award orders to the preferred supplier. Information about Supply and Demand: Procedure for Procurement This procedure should give a supplier who is financially secure, with good long-term prospects, can supply the necessary materials, guarantees quality, is reliable, has short lead times, quotes reasonable prices and finance arrangements, is responsive to customers needs, has necessary the skills and experience, has a good reputation, uses convenient procurement systems and probably has many more enviable qualities. 23
24 Information about Supply and Demand: Structure of a Purchasing Cycle Information about Supply and Demand: Information Flows for Order Processing 24
25 Information about Supply and Demand: e-procurement Changing patterns of procurement, Supply chains getting shorter, More customers use the Web, Alliances are reducing the number of suppliers used by each organization, Amounts purchased are increasing as companies focus on their core activities and outsource more, and Customers are demanding more from products and conditions of purchase. e-procurement. Surveys (see, Cummings, 2002) suggest that over 60% of UK companies were using e-procurement by % of corporate buyers have purchased goods online, and 37% percent expect to increase the amount of their budget spent online Buyers-Expe#sthash.n2DgDYSe.dpuf Information about Supply and Demand: Advantages of e-procurement allowing instant access to suppliers anywhere in the world; creating a transparent market where product details are readily available and easily compared; Allowing comparison of standard terms of trade and rapid negotiation of details; automating procurement with standard procedures; greatly reducing the time needed for transactions; reducing costs, typically by 12 15%; allowing outsourcing of some procurement activities to suppliers or third parties; integrating seamlessly with suppliers information systems. 25
26 Warehousing: Purpose of Warehouses A warehouse is any place for storing materials. Different terms: distribution centres and logistics centres. Inventory management is the management function associated with decisions about stock, while warehousing is the operational function that physically looks after it. Main aims of a warehouse: providing necessary storage at key points in a supply chain, giving secure storage of the type needed by materials, keeping materials in good condition with little damage or loss, having low costs with high productivity and utilization of resources, and giving safe working conditions. Warehousing: Warehousing Activities receiving materials from upstream suppliers; identifying the materials delivered, matching them to orders and finding their intended user; unloading materials from delivery vehicles; doing necessary checks on quantity, quality and condition; labelling materials (usually with bar codes or magnetic stripes) so they can be identified and monitored; sorting materials as needed; moving materials to a bulk storage area; holding them in stock until needed; when necessary, moving materials from bulk storage to a smaller picking store; 26
27 Warehousing: Warehousing Activities picking materials from this store to meet orders; moving the materials to a marshalling area; assembling materials into orders; packing and packaging as necessary; loading delivery vehicles and dispatching the order; controlling all communications and related systems, such as inventory control and finance. Warehousing: New Warehousing Activities Consolidating: Warehouses are places where small loads from different suppliers are combined to give full vehicle loads for delivery to customers. This is the basis of postponement, where the final steps of production are left to the last possible moment. Bulk-breaking: Here a supplier sends all the demand for a particular area in a single delivery to a local warehouse. The warehouse breaks this delivery into the separate orders and passes them on to each customer. Cross-docking The arrival of materials at a warehouse is coordinated with its departures to customers, so that they are transferred directly from the arrival area to the loading area, and immediately sent for delivery to downstream customers. 27
28 Warehousing: Warehouse Design Essential elements in a warehouse are: an arrival bay, or dock, where materials coming from suppliers are delivered, checked and sorted; a storage area, where materials are kept in stock; a departure bay, or dock, where customers orders are assembled and sent out; a material handling system, for moving materials around; an information system, which records the location of all materials, arrivals from suppliers, departures to customers, and other relevant information. Warehousing: Warehouse Design 28
29 Warehousing: Warehouse Design Warehousing: Warehouse Design Material handling equipment 1. Manual warehouses: trolley, handtrucks, and carousels Manual warehouses only work if the items are small and light enough to lift, with shelves that are low enough to reach and close together to reduce walking. 2. Mechanized warehouses: reach trucks, order-picking machines, forklift trucks, cranes, towlines, conveyors, tractors or trains, and carousels. 3. Automated warehouses. High storage areas, AGVs, high speed stacker cranes, robots, and a warehouse management system to record material locations, and control all movements. 29
30 Warehousing: Packaging Collecting together materials into these standard packages is called unitization to form unit loads. Packaging serves four basic functions: identifies the product and gives basic information; protects items while moved through the supply chain; makes handling easier; Assists in marketing, promoting the product, advertising and giving information to customers. 2 types of packaging: the interior, or consumer packaging, is designed for the customer and includes the marketing and promotional materials. the exterior, or industrial packaging, is designed to identify the contents, give information to organizations in the supply chain, protect the contents, and make handling easier. 30
Glossary of Inventory Management Terms
Glossary of Inventory Management Terms ABC analysis also called Pareto analysis or the rule of 80/20, is a way of categorizing inventory items into different types depending on value and use Aggregate
More informationInterpreting the Numbers: From Data to Design. William Elenbark, Consultant Gross & Associates 732-636-2666; belenbark@grossassociates.
Interpreting the Numbers: From Data to Design William Elenbark, Consultant Gross & Associates 732-636-2666; belenbark@grossassociates.com Robert Muller, Industrial Engineer Gross & Associates 732-636-2666;
More informationContents. List of figures List of tables. Abbreviations
Contents List of figures List of tables Preface Abbreviations xv xxi xxiii xxix PART 1 CONCEPTS OF LOGISTICS AND DISTRIBUTION 1 Introduction to logistics and distribution 3 Introduction 3 Definitions 4
More informationCompetence Certificate in Purchasing & Supply Chain Management
Competence Certificate in Purchasing & Supply Chain Management Welcome to the Competence Certificate in Purchasing & Supply Chain Management s programme. We hope you find the course interesting and that
More informationINVENTORY MANAGEMENT: ANALYZING INVENTORY TO MAXIMIZE PROFITABILITY
INVENTORY MANAGEMENT: ANALYZING INVENTORY TO MAXIMIZE PROFITABILITY Jon Schreibfeder Effective Inventory Management, Inc. Sponsored by Every company strives to improve profitability. Countless hours are
More informationINVENTORY MANAGEMENT. 1. Raw Materials (including component parts) 2. Work-In-Process 3. Maintenance/Repair/Operating Supply (MRO) 4.
INVENTORY MANAGEMENT Inventory is a stock of materials and products used to facilitate production or to satisfy customer demand. Types of inventory include: 1. Raw Materials (including component parts)
More information3.7 Logistics Execution
106 3 SAP EP Operations 3.7 Logistics Execution The Logistics Execution (LE) component controls and organizes both the movement of material within the enterprise (warehouse management) and also transportation
More informationTeaching Manual-Operation Management. Gunadarma University. Week : 9 Subject : INVENTORY MANAGEMENT Content :
Week : 9 Subject : INVENTORY MANAGEMENT Content : WHY INVENTORY a. One of the most expensive assets of many companies representing as much as 50% of total invested capital b. Operations managers must balance
More informationtutor2u Stock Control The Importance of Managing Stocks AS & A2 Business Studies PowerPoint Presentations 2005
Stock Control The Importance of Managing Stocks AS & A2 Business Studies PowerPoint Presentations 2005 What Are Stocks? Three main categories of stocks Raw Materials Work in Progress Finished Goods Types
More informationSage ERP X3 Distribution
Distribution Distribution Sage ERP X3 distribution functionality is comprised of Sales, Purchasing, and Inventory. Sage ERP X3 Sales enables you to monitor all information concerning customers or prospects,
More informationCOORDINATION IN THE SUPPLY CHAIN: VENDOR MANAGED INVENTORY IS THE WAY TO GO
www.sjm.tf.bor.ac.yu Serbian Journal of Management 1 (1) (2006) 41-47 Serbian Journal of Management COORDINATION IN THE SUPPLY CHAIN: VENDOR MANAGED INVENTORY IS THE WAY TO GO R. Piplani * Center for Supply
More informationProject and Production Management Prof. Arun Kanda Department of Mechanical Engineering Indian Institute of Technology, Delhi
Project and Production Management Prof. Arun Kanda Department of Mechanical Engineering Indian Institute of Technology, Delhi Lecture - 38 Basic Inventory Principles In today s lecture we are going to
More informationVisibility in the Import Supply Chain Getting a Clear View into Competitive Advantage
Visibility in the Import Supply Chain Getting a Clear View into Competitive Advantage A GT Nexus White Paper Executive Summary Leading importers are reaping the benefits of end-to-end global supply chain
More informationAccounting for inventory. www.brightpearl.com
Accounting for inventory Whats inside Accounting for your inventory is as important as accounting for your sales. Every product you have on the shelf has a cost value, and the total cost of goods is likely
More informationInventory basics. 35A00210 Operations Management. Lecture 12 Inventory management. Why do companies use inventories? Think about a Siwa store
35A00210 Operations Management Lecture 12 Inventory management Lecture 12 Inventory management Inventory basics Inventory basics Pros and cons of inventory Inventory numbers Inventory management in practice
More informationUnderstanding Stock and Inventory Control
Understanding Stock and Inventory Control Stock control, otherwise known as inventory control, is used to show how much stock you have at any one time, and how you keep track of it. It applies to every
More informationMSD Supply Chain Programme Strategy Workshop
MSD Supply Chain Programme Strategy Workshop Day 2 APPENDIX Accenture Development Partnerships Benchmarking MSD s Current Operating Supply Chain Capability 1.0 Planning 2.0 Procurement 3.0 Delivery 4.0
More informationInventory Cycle Counting
Inventory Cycle Counting 20 Nassau Street, Suite 244 Princeton, NJ 08543-7345 Phone: (609) 275-4444 Fax: (609) 275-5651 Email: rem@remassoc.com WWW: http://www.remassoc.com TABLE OF CONTENTS Cost of Inaccurate
More informationPricing and Credit Decisions
CHAPTER OUTLINE Spotlight: Dynamic Network Services (http://www.dyn.com) 1 Setting a Price Discuss the role of cost and demand factors in setting a price. Cost Determination for Pricing Total cost includes
More informationSAMPLE QUESTIONS EXAM EXEMPLAR QUESTIONS. AC4 - Inventory and logistics operations. Level 3 Advanced Certificate in Procurement and Supply Operations
Level 3 Advanced Certificate in Procurement and Supply Operations AC4 - Inventory and logistics operations EXAM EXEMPLAR QUESTIONS MULTIPLE CHOICE QUESTIONS AND ANSWERS The correct answer will be identified
More informationWhite Paper February 2009. IBM Cognos Supply Chain Analytics
White Paper February 2009 IBM Cognos Supply Chain Analytics 2 Contents 5 Business problems Perform cross-functional analysis of key supply chain processes 5 Business drivers Supplier Relationship Management
More informationCertifying the Industrial Athlete of the Future. 2014 Edition
Certifying the Industrial Athlete of the Future Work Standards Logistics 2014 Edition Manufacturing Skill Standards Council 1410 King St. Alexandria, VA 22314 www.msscusa.org Background The Manufacturing
More informationLogistics Management Inventory Cycle Inventory. Özgür Kabak, Ph.D.
Logistics Management Inventory Cycle Inventory Özgür Kabak, Ph.D. Role of Inventory in the Supply Chain Improve Matching of Supply and Demand Improved Forecasting Reduce Material Flow Time Reduce Waiting
More informationCSCMP Level One : Cornerstones of Supply Chain Management. Learning Blocks
CSCMP Level One : Cornerstones of Supply Chain Management Learning Blocks Level one training will consist of eight learning blocks: 1. Supply Chain Concepts 2. Demand Planning 3. Procurement and Supply
More informationAWARE ENTERPRISE SYSTEM
AWARE ENTERPRISE SYSTEM The Aware Enterprise System from Aware Business Systems Pty Ltd is a remarkable software package designed for Australian manufacturers and distributors. Designed and developed in
More informationThe Training Material on Supply Chain Collaboration & Logistics Solutions has been produced under Project Sustainable Human Resource Development in
The Training Material on Supply Chain Collaboration & Logistics Solutions has been produced under Project Sustainable Human Resource Development in Logistic Services for ASEAN Member States with the support
More informationStorage & Inventory Control
s Guide Storage & Inventory Control Storage and Inventory Control include the activities related to holding material and the processes of counting and transacting the material as it moved through the warehouse.
More informationSage MAS 90 and 200. Extended Enterprise Suite S
Sage MAS 90 and 200 Extended Enterprise Suite S An End-to-End Approach to Business Software At Sage, we ve been supporting businesses like yours with world-class business software for well over a quarter
More informationChapter 9 Managing Inventory in the Supply Chain
Chapter 9 Managing Inventory in the Supply Chain Inventory is an asset on the balance sheet and inventory cost is an expense on the income statement. Inventories impacts return on asset (ROA) Inventory
More informationChapter 6 Inventories 高立翰
Chapter 6 Inventories 高立翰 Study Objectives 1. Describe the steps in determining inventory quantities. 2. Explain the accounting for inventories and apply the inventory cost flow methods. 3. Explain the
More informationChapter 11. MRP and JIT
Chapter 11 MRP and JIT (Material Resources Planning and Just In Time) 11.1. MRP Even if MRP can be applied among several production environments, it has been chosen here as a preferential tool for the
More informationContent. Chapter 1 Supply Chain Management An Overview 3. Chapter 2 Supply Chain Integration 17. Chapter 3 Demand Forecasting in a Supply Chain 28
Content Part I: Principles of Supply Chain Management Chapter 1 Supply Chain Management An Overview 3 Part II: Supply Chain Planning & Design Chapter 2 Supply Chain Integration 17 Chapter 3 Demand Forecasting
More informationERP for Food Manufacturing
WHITE PAPER ERP for Food Manufacturing ABSTRACT The food industry involves the commercial movement of food from field to fork. The modern food industry is the result of technological and cultural changes
More informationAutomated Material Handling and Storage Systems
Automated Material Handling and Storage Systems How do we define automated material handling and storage systems? How do they work? What is automated guided vehicle systems? Automated Material Handling
More informationStrategies for optimizing your inventory management
Part of the Deloitte working capital series Make your working capital work for you Strategies for optimizing your inventory management The Deloitte working capital series Strategies for optimizing your
More informationAfter this unit you should be able to answer following questions A. Concept Questions B. Short notes 1. Inventory and Inventory management 2.
After this unit you should be able to answer following questions A. Concept Questions B. Short notes 1. Inventory and Inventory management 2. Lead time 3. Reserve stock and safety stock 4. Reorder level
More informationSolutions, Systems, Savings
Solutions, Systems, Savings WPM Group brings responsive capability in print management to deliver cost efficiencies & constant brand control to our clients. We use our independent procurement power to
More informationAAT LEVEL 3 LESSON 7. Association of Accounting Technicians (AAT) Example Course Materials
LESSON 7 Account for the Valuation of Inventory On completing this lesson you should be able to: Identify categories of inventory as referred to within the accounting standard IAS 2 (Inventories) Explain
More informationThe power to transform your business
The power to transform your business Optimus 2020 continues to be the number one choice for litho and packaging printers worldwide. What is the secret of our longevity? Constant research and forward thinking
More informationOperations Strategies
Operations Strategies OUTSOURCING! PERFORMANCE OBJECTIVES! TECHNOLOGY! INVENTORY MANAGEMENT! OVERCOMING RESISTANCE TO CHANGE! NEW PRODUCT DESIGN AND DEVELOPMENT! SUPPLY CHAIN MANAGEMENT!! GLOBAL SOURCING!
More informationSUPPLY CHAIN SERVICES
EB-0-0 Exhibit F Schedule Page of SUPPLY CHAIN SERVICES INTRODUCTION Supply Chain supports THESL asset management plans by ensuring that all required goods and services are available when needed. Strong
More informationBusiness Challenges. Customer retention and new customer acquisition (customer relationship management)
Align and Optimize Workflows with Lean Dan Marino Marino Associates, LLC Strategic and tactical planning Information systems integration Customer retention and new customer acquisition (customer relationship
More informationZETA. Business Software Defined INVENTORY & ORDER MANAGEMENT
Business Software Defined INVENTORY & ORDER MANAGEMENT Overview The order processing module of Zeta ERP offers a comprehensive set of best-of-breed component for both order and logistics management. This
More informationSupply Chain Management: Introduction
Supply Chain Management: Introduction Donglei Du (ddu@unb.edu) Faculty of Business Administration, University of New Brunswick, NB Canada Fredericton E3B 9Y2 Donglei Du (UNB) SCM 1 / 44 Table of contents
More informationTOPIC NO 30515 TOPIC Supplies and Materials Inventory Table of Contents Overview...2 Policy...4 Procedures...8 Internal Control...
Table of Contents Overview...2 Introduction...2 Effective management system...3 Maintenance versus value...3 Cost reduction...3 Policy...4 Inventory records...4 Considerations for agencies with large inventories...7
More informationScope of Supply Chain Management (SCM)
Scope of Supply Chain Management (SCM) Session Speaker Prof. P.S.satish 1 Session Objectives To understand the scope of Supply Chain Management To compare different activities of Supply Chain Management
More informationUnderstanding Gross Margin Impacts on Profitability
Understanding Gross Margin Impacts on Profitability Annual Catalog Conference June, 2001 Presented by: GJM Associates Gross Margin Audit: Agenda Identify Gross Margin Components Review Mathematics Components
More informationLX One Logistics Software
LX One Logistics Software Warehouse logistics for the modern business In the modern world, reliability, efficiency and a capacity to innovate are fundamental to the success of any company. Warehouse logistics
More informationBSCM Sample TEST. CPIM(Certified In Production & Inventory Management) - 1 -
BSCM Sample TEST. 1. Which of the following demand fulfillment approaches typically provides the longest delivery time? A) Engineer-to-order. B) Make-to-order. C) Assemble-to-order. D) Make-to-stock. 2.
More informationChapter 6. An advantage of the periodic method is that it is a easy system to maintain.
Chapter 6 Periodic and Perpetual Inventory Systems There are two methods of handling inventories: the periodic inventory system, and the perpetual inventory system With the periodic inventory system, the
More informationMerchant Order Management System Key Features
Incorporates all the features to help the busy merchant business run smoothly including, Multi-Company, Multi-Site, Multi-Warehouse Document Imaging and View of All documentation Company Wide Real Time
More informationABC ANALYSIS OF MRO INVENTORY
ABC ANALYSIS OF MRO INVENTORY Background Although there is not a direct correlation between the two, an ABC Analysis on MRO parts is somewhat similar to Criticality Rankings that are developed for plant
More informationGAO. Inventory System Checklist Systems Reviewed Under the Federal Financial Management Improvement Act of 1996. Financial Management Series
GAO United States General Accounting Office Financial Management Series May 1998 Inventory System Checklist Systems Reviewed Under the Federal Financial Management Improvement Act of 1996 GAO/AIMD-98-21.2.4
More informationCHOICES The magazine of food, farm, and resource issues
CHOICES The magazine of food, farm, and resource issues 4th Quarter 2005 20(4) A publication of the American Agricultural Economics Association Logistics, Inventory Control, and Supply Chain Management
More informationChapter 8 Order Management and Customer Service
Chapter 8 Order Management and Customer Service Order Management executes the operating plan based on demand forecast. It is the interface between buyers and sellers and consists of: Influencing the Order
More informationTHE STRATEGIC USE OF IT
RELEVANT TO ACCA QUALIFICATION PAPER P3 Studying Paper P3? Performance objectives 7, 8 and 9 are relevant to this exam The Paper P3 syllabus contains an important section titled Information technology.
More informationLine502007 Powerful accounting software for growing businesses
SAG01768 SAGE BROCHURE ARTWORK 26/7/06 1:36 pm Page 1 For more information on Sage Line 50 2007 or any other Sage product or service please call SAGE CUSTOMERS 0800 33 66 33 Line502007 Powerful accounting
More informationHow do I Use the Inventory/Stock Management System?
1/11 How do I Use the Inventory/Stock Management System? 1. Introduction. 2. Code Management. 3. Setting up the Product Item Catalogue. 4. Managing Prices and Price Lists. 5. Bulk Price Update. 6. Appendix
More informationInventory Management. NEELU TIWARI Jaipuria Institute of Management, Vasundhara Gzb.
INTERNATIONAL JOURNAL OF BUSINESS MANAGEMENT, ECONOMICS AND INFORMATION TECHNOLOGY Vol. 3, No. 2, July-December 2011: 303-207 Inventory Management NEELU TIWARI Jaipuria Institute of Management, Vasundhara
More informationOperations and Supply Chain Management Prof. G. Srinivasan Department of Management Studies Indian Institute of Technology Madras
Operations and Supply Chain Management Prof. G. Srinivasan Department of Management Studies Indian Institute of Technology Madras Lecture - 41 Value of Information In this lecture, we look at the Value
More informationERP Areas and Modules / Trading
ERP Areas and Modules / Trading These modules reflect the multi national character of the SoftBASE Business Suite. They support multiple languages, currencies, and adapt easily to cultural differences.
More informationContact Relations Manager
Contact Relations Manager CRM is not just for the Sales department any more. Everyone should have access to a place where they can make notes, be reminded of promises, be able to keep track of their important
More informationTransaction Processing and Enterprise Resource Planning Systems. Goal of Transaction Processing. Characteristics of Transaction Processing
C H A P T E R 9 Transaction Processing and Enterprise Resource Planning Systems Goal of Transaction Processing Provide all the information needed to keep the business running properly and efficiently.
More informationCOST AND MANAGEMENT ACCOUNTING
EXECUTIVE PROGRAMME COST AND MANAGEMENT ACCOUNTING SAMPLE TEST PAPER (This test paper is for practice and self study only and not to be sent to the institute) Time allowed: 3 hours Maximum marks : 100
More informationOperations Management. 3.3 Justify the need for Operational Planning and Control in a selected Production Process
Operations Management 3.3 Justify the need for Operational Planning and Control in a selected Production Process Key Topics LO3 Understand how to organise a typical production process 3.3 justify the need
More informationInventory management within a food factory
Inventory management within a food factory Daniela Magdalena DINU Ph.D. Student, University of Economic Studies, Bucharest, Romania e-mail: danielapopa74@yahoo.com ABSTRACT An efficient management of inventories
More informationWHITE PAPER. Kitting Can Optimize Inventory Management and Performance
WHITE PAPER Kitting Can Optimize Inventory Management and Performance Applied Industrial Technologies Corporate Headquarters 1 Applied Plaza Cleveland, OH 44115 216-426-4000 www.applied.com Applied Industrial
More informationEconomic Ordering Quantities: A Practical Cost Reduction Strategy for Inventory Management
Economic Ordering Quantities: A Practical Cost Reduction Strategy for Inventory Management By Todd Duell Abstract Inventory management is an important concern for all managers in all types of businesses.
More informationWorking Capital Management
Dr. Hendrik Vater, CFO DHL Supply Chain Southern Europe Working Capital Management The ICV s Guideline to Optimize Inventories, Receivables and Payables 2nd International Controller Conference in Croatia
More informationAbstract: Why inventory exists. Types of inventory. This is sequel to OM 601 assignment.
Abstract: This is sequel to OM 601 assignment. The reason for this assignment is to improve overall competitiveness of Hefley Finland by focusing on inventory management. In this assignment I first clarify
More informationInventories. 2014 Level I Financial Reporting and Analysis. IFT Notes for the CFA exam
Inventories 2014 Level I Financial Reporting and Analysis IFT Notes for the CFA exam Contents 1. Introduction... 3 2. Cost of Inventories... 3 3. Inventory Valuation Methods... 4 4. Measurement of Inventory
More informationMaterials: Inventory Control
CHAPTER 14 Materials: Inventory Control Store and Storekeeping Stores playa vital role in the operation of a company. Generally unworked material is stored and the place where it is stored is called Store
More informationELA Standards of Competence on the Supervisory/Operational Management Level
ELA Standards of Competence on the Supervisory/Operational Management Level 2.0 Basic Supply Chain Concepts 2.0.01 Explain the scope and role of component activities within the supply chain 2.0.02 Map
More informationTransportation Management Case Studies. Memorandum 707
Transportation Management Case Studies Memorandum 707 Transportation Management Case Studies Transportation management has come a long way since the days of the green eye shade with its emphasis on regulated
More informationValue chains, value networks and supply chain management
RELEVANT TO ACCA QUALIFICATION PAPER P3 Value chains, value networks and supply chain management Sections A4, E2 and E3 of the Syllabus and Study Guide relate to value chains and value networks, and Sections
More information09/11/2015. ACS 3907 E-Commerce. Payment Methods. General Payment Systems. Instructor: Kerry Augustine November 10 th 2015
ACS 3907 E-Commerce Instructor: Kerry Augustine November 10 th 2015 Payment Methods General Payment Systems Cash no authentication, no transaction fee, anonymous Easily stolen, no float time, hard for
More information============================================================
UNIT-3 ============================================================ UNIVERSITY SYLLABUS Inventory Control: Inventory, cost, Deterministic models, Introduction to supply chain management. ============================================================
More informationInventory Management - A Teaching Note
Inventory Management - A Teaching Note Sundaravalli Narayanaswami W.P. No.2014-09-01 September 2014 INDIAN INSTITUTE OF MANAGEMENT AHMEDABAD-380 015 INDIA Inventory Management - A Teaching Note Sundaravalli
More informationInventory: Independent Demand Systems
Inventory: Independent Demand Systems Inventory is used in most manufacturing, service, wholesale, and retail activities and because it can enhance profitability and competitiveness. It is widely discussed
More informationEffective Replenishment Parameters By Jon Schreibfeder
WINNING STRATEGIES FOR THE DISTRIBUTION INDUSTRY Effective Replenishment Parameters By Jon Schreibfeder >> Compliments of Microsoft Business Solutions Effective Replenishment Parameters By Jon Schreibfeder
More informationWORKING CAPITAL MANAGEMENT
CHAPTER 9 WORKING CAPITAL MANAGEMENT Working capital is the long term fund required to run the day to day operations of the business. The company starts with cash. It buys raw materials, employs staff
More informationERP s Automated Workflows Deploy Advanced Business Processes
ERP s Automated Workflows Deploy Advanced Business Processes Abstract A company s sustainable competitive advantage derives, in part, from its capacity to act on new information quickly. Workflow technology
More informationInventory Control Subject to Known Demand
Production and Operation Managements Inventory Control Subject to Known Demand Prof. JIANG Zhibin Department of Industrial Engineering & Management Shanghai Jiao Tong University Contents Introduction Types
More informationSUPPLY CHAIN MANAGEMENT
SUPPLY CHAIN MANAGEMENT SOLUTIONS THAT MAKE A DIFFERENCE SYSTEM OVERVIEW Dataflow Supply Chain Management is a fully-featured ERP solution designed for the specific needs of today s manufacturing and
More informationThe First Steps to Achieving Effective Inventory Control. By Jon Schreibfeder EIM. Effective Inventory Management, Inc.
The First Steps to Achieving Effective Inventory Control By Jon Schreibfeder EIM Effective Inventory Management, Inc. This report is the first in a series of white papers designed to help forward-thinking
More informationINTEGRATED ERP FOR FOOD MANUFACTURING. A Strategic Weapon for a Competitive Environment
INTEGRATED ERP FOR FOOD MANUFACTURING A Strategic Weapon for a Competitive Environment A Strategic Weapon for a Competitive Environment INTRODUCTION Today, food manufacturers face significant challenges.
More informationRECOMMENDATIONS ON BUSINESS PLAN PREPARATION
RECOMMENDATIONS ON BUSINESS PLAN PREPARATION 1. General provisions Business plan must contain: name of the investment project, as well description of its essence and feasibility; substantiation of the
More informationMetRo Warehouse Management System. Maximize. your. logistic. performance. MetRo WMS means intelligence
MetRo Warehouse Management System Maximize your performance logistic MetRo WMS means intelligence MetRo WMS Rocla MetRo is a software package for warehouse management. Warehouse Management System, WMS,
More informationEffectively managing your fleet with the Annata Dynamics FLEET solution
White Paper Effectively managing your fleet with the Annata Dynamics FLEET solution A company s fleet can be made up of many vehicle or equipment types, anything that needs to be tracked from initial purchase
More informationEVERYTHING YOU NEED TO KNOW ABOUT INVENTORY
EVERYTHING YOU NEED TO KNOW ABOUT INVENTORY Introduction Inventory is considered the necessary evil of the supply chain. In fact, there has been a whole movement; lean manufacturing that has tried to reduce
More informationMATERIALS MANAGEMENT. Module 9 July 22, 2014
MATERIALS MANAGEMENT Module 9 July 22, 2014 Inventories and their Management Inventories =? New Car Inventory Sitting in Parking Lots Types of Inventory 1. Materials A. Raw material B. WIP C. Finished
More informationSaasu Online Accounting. Inventory presentation
Saasu Online Accounting Inventory presentation Presentation objectives This presentation aims to reinforce the information provided in the Inventory Training Webinar. MORE: You can access more information
More informationSUGGESTED CONTROLS TO MITIGATE THE POTENTIAL RISK (Internal Audit)
Unit: Subject: Sarbanes-Oxley Act Review - Inventory Management Title: Risk & Control Identification Year end: MILL RAW MATERIALS Receiving of Raw Materials Raw materials are received and accepted only
More informationInfosys BPO. Point of View. Releasing Supply Chain Value Through Better Order Management. Andrew Dobosz, Andrew Dougal. www.infosysbpo.
Infosys BPO Point of View Releasing Supply Chain Value Through Better Order Management Andrew Dobosz, Andrew Dougal www.infosysbpo.com Order Management: Where Companies Are Today When companies attempt
More informationChapter 16 Inventory Management and Control
Chapter 16 Inventory Management and Control We shall be interested primarily in the control of material in manufacturing. Actually, we are concerned with the control of the flow of material from a raw
More informationManufacturing Inventory Management with Manufacturing Processing, Job Shop Integration, Bar Coding and Sales Analysis Part #105.
Manufacturing Inventory Management with Manufacturing Processing, Job Shop Integration, Bar Coding and Sales Analysis Part #105 User Manual Version 7.3 Information in this document is subject to change
More informationTHE WORKING CAPITAL CYCLE IN INTERNATIONAL TRADE
THE WORKING CAPITAL CYCLE IN INTERNATIONAL TRADE Introduction The working capital cycle is the period of time which elapses between the points at which cash is used in the supply/production process, to
More informationChapter 13. Working Capital Management
Chapter 13 Working Capital Management Learning Objectives 1. Model the cash conversion cycle and explain its components. 2. Understand why the timing of accounts receivable is important and explain the
More informationSage 200 Manufacturing Datasheet
Sage 200 Manufacturing Datasheet Sage 200 Manufacturing is a powerful manufacturing solution that enables you to manage your entire supply chain in detail, end to end, giving you the information needed
More informationWarehouse and Production Management with SAP Business One
SAP Product Brief SAP s for Small Businesses and Midsize Companies SAP Business One Objectives Warehouse and Production Management with SAP Business One Real-time inventory and production management Real-time
More information