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1、 Module 11 Managing InventoryManaging Inventory Gao Yongzheng12/28/20211 Module 11 Managing InventoryThis Module will help you to:12/28/20212 Module 11 Managing InventoryContent Overview Unit 1 Introduction Unit 2 Warehouse and Inventory Operations Unit 3 Manage and Forecasting Inventory Unit 4 Inve
2、ntory Planning Unit 5 Warehouse Planning and Systems- 5 Units :12/28/20213 Module 11 Managing InventoryUnit 1 IntroductionF What is inventory?F Why keep inventory?F What is inventory Management?F Why is it important?F What does inventory Management include?12/28/20214 Module 11 Managing InventoryWha
3、t is inventory?Inventory or stock, as it is also called is defined in supply management as the stored accumulation of material resources to be used in a transformation process. It includes: Raw materials the inventory of individual ingredients or components used in production. Work in process (WIP)
4、- the inventory of partially produced products at various stages in the manufacturing process. Finished goods - completed products, or products that have been manufactured.12/28/20215 Module 11 Managing InventoryWhy keep inventory ?An enterprise may hold inventories for many good reasons, the most c
5、ommon of which is to be a buffer in the supply chain.Supply SellProductionFirst ProcedureLast ProcedureRaw materials inventoryWIP inventoryFinished Products inventory12/28/20216 Module 11 Managing InventoryWhy keep inventory ?(cont.)The specific reasons includes : Prevent from shortage of goods Quic
6、k delivery and raise customer satisfaction Continuous or best-scale batch production Lessen purchase times and the related cost Purchase price advantage And so on 12/28/20217 Module 11 Managing InventoryWhat is inventory Management? Inventory Management is simply the way that the accumulation of the
7、 inventories is optimized so that the business can satisfy its customerss demands for the delivery of a required quantity of products, at the right time and the minimum cost to business. Product Delivery to CustomersRequired QuantityMinimum CostRight TimeOptimum Inventory Accumulation12/28/20218 Mod
8、ule 11 Managing InventoryWhat does inventory Management include? Analyzing the build-up and evaluating the need for keeping inventory in the supply chain Forecasting demand for materials and components Development of inventory monitoring Supply planning and control mechanisms Also dealing with physi
9、cal inventory handling locations and facilities12/28/20219 Module 11 Managing InventoryWhy is it important ?Inventory Management will have some very important effects on: Customer service level Smooth production Cost & profit Cash flow And so on So inventory management is very important in a com
10、pany!12/28/202110 Module 11 Managing InventoryRecall and SummaryF What is inventory?F Why keep inventory?F What is inventory Management?F Why is it important?F What does inventory Management include?12/28/202111 Module 11 Managing InventoryNow that inventory manage-ment is very important to a compan
11、y, then How to do it well?I think, the following units will tell us some good answers. Lets go on to Unit 2!12/28/202112 Module 11 Managing InventoryUnit 2 Warehouse and Inventory OperationsF Mentoring movementsF Measuring & evaluating inventoryF Receipt & issue of inventoryF Systems to repl
12、enish inventoryF How much to order12/28/202113 Module 11 Managing InventoryMentoring movementsF For each location where materials are held, stock record balances need to accurately reflect what is physically in inventory.F In addition, inventory balances held in the accounting records need to be cap
13、able of being reconciled with physical stock counts undertaken during audit and periodic stocktaking activities.F So mentoring movements is necessary to keep the inventory balances to be correct. 12/28/202114 Module 11 Managing InventoryReceipt & issue of inventoryNotification of goods receiptRe
14、ceipt of copy of purchase orderAcknowledgementSchedule/plan deliveryDeliveryStorage/put awayInspectionUnloadingReceipt12/28/202115 Module 11 Managing InventoryReceipt & issue of inventory cont.Cost allocationUser determines requirementRequisition authorizedPresented to storesIdentification of th
15、e goodsAdjustment of stock recordsDelivery / collectionPickingIssue12/28/202116 Module 11 Managing InventorySystems to replenish inventoryF Re-order level (fixed order quantity, variable order interval)F Periodic review (fixed order interval, variable order quantity)F Demand-driven lean supply syste
16、ms (orders placed in the precise quantity and time required for production)12/28/202117 Module 11 Managing InventoryHow much to orderF Balance amongst the cost of holding stock & shortage cost and purchasing cost & ordering cost & carrying cost and find out to the most economic order qua
17、ntity (EOQ)F The common formula to compute EOQ is: EOQ = Square root (2Co*D/Pi)12/28/202118 Module 11 Managing InventoryRecall and resumeF Mentoring movementsF Measuring & evaluating inventoryF Receipt & issue of inventoryF Systems to replenish inventoryF How much to order12/28/202119 Module
18、 11 Managing InventoryUnit 3 Managing and forecasting inventoryF Lead-time managementF Enterprise resource management F Demand forecasting techniques12/28/202120 Module 11 Managing InventoryUnit 4 Inventory PlanningF Service level policiesF Categorisation techniquesF Traceability & variety reductionF Coding systemsF Insurance12/28/202121 Module 11 Managing InventoryUnit 4 Inventory Planning cont.F Debenture or loan security clausesF The inventory management planF Performance analysis & reportingF Disaster recovery planning12/28/202122 Module
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