INVENTORY MANAGEMENT
GROUP MEMBERS:Aparna SambamurthiUlka BhisaleAkshay SadekarSayali SukhthankarBhushan SadaphulePrathamesh DeoKomal Satve
Pooja DhamankarRuksana PathanBhakti NalavadeTruptee SalunkheKrupali DandekarSmita BaneDarshana NaikRia Gupta
Inventory Management
INVENTORY MANAGEMENT
DEFINITION:
Inventory management, or inventory control, is an attempt to balance inventory needs and requirements with the need to minimize costs resulting from obtaining and holding inventory.
WHAT IS INVENTORY?
•Inventory is a list for goods and materials, or those goods and materials themselves, held available in stock by a business.
•Inventory may be defined as ‘”usable but idle resource”
INVENTORY
WHY KEEP INVENTORY ?
JAN FEB MAR APR MAY JUN
Demand 50 50 0 100 200 200
Produce 100 100 100 100 100 100
Month-end inventory
50 100 200 200 100 0
WHY KEEP INVENTORY ?
MEET DEMAND KEEP OPERATIONS RUNNING LEAD TIME HEDGE QUANTITY DISCOUNT SMOOTHING REQUIREMENTS
TYPES OF INVENTORY
Transit Inventory Buffer Inventory Anticipation Inventory Decoupling Inventory MRO Goods Inventory
FLOW OF INVENTORY
OBJECTIVES OF INVENTORY MANAGEMENT
Provide the desired level of customer service
Achieve cost-efficient operations
Minimize inventory investment
Production control
Balancing
PRICING OF RAW MATERIALS
Several methods are used for pricing inventories used in
production. The important ones are :
1) First-in first-out (FIFO) method 2) Last-in first-out (LIFO) method 3) Weighted average cost method 4) Standard cost (price) method
Contd….
FIFO METHOD
LIFO METHOD
Weighted average cost method
Standard cost (price) method
INVENTORY CONTROL SYSTEMS
ABC Analysis VED Analysis GOLF Analysis HML Analysis SDE Analysis
VARIOUS COSTS RELATED TO INVENTORY MANAGEMENT:
ORDERING COST
CARRYING COST
INVENTORY MANAGEMENT MODELS
PUSH MODEL Economic Order Quantity (EOQ) MRP-1 MRP-2PULL MODEL JIT KANBAN
EOQ
How much should be ordered? Economic Order Quantity (EOQ)
When should it be ordered? Re - order point Safety stock level
INVENTORY MANAGEMENT:Computerized applications
Computerized applications
MRP-1 (Material Requirement Planning)
MRP is a tool to deal with these problem provides answers for several questions:
What items are required? How many are required? When are they required?
Outputs
There are two outputs and a variety of messages/reports:
Output 1 is the "Recommended Production Schedule"
Output 2 is the "Recommended Purchasing Schedule".
Problems of MRP integrity of the data Need high level of discipline Cost of software
MRP 2 (Material Resource Planning)
Co-ordination of entire manufacturing production
Developing a master schedule plan Feedback system Resource scheduling Batching Software extension programs Data accuracy
PULL MODEL
Just-in-time system (JIT)
JIT II
JIT Activity should not take place until there is a need
for it. It is characterised by maintaining zero inventories. Involves close coordination between buyers and
suppliers. Prerequisites of a successful system: Buyer-seller partnership Online communication and information sharing Commitment to zero defects from both the sides Frequent and small lot size shipments
JIT II
Vendor managed inventory, was made popular by Bose corporation
Supplier takes charge of inventory management of the product and manage the replenishment process based on the consumption pattern of the consumer.
Use EDI
3 essential things for the success of JIT II: Right partner Right set of products Mutual trust
Techniques used in JIT
Pokayoke Kanban TPM Jidoka Single minute exchange of dies
(SMED)
How to Reduce Inventory Cost
Enhance your Planning Forecasting and Analysis Use Inventory Management Systems Lowering the Company's Inventory Holding
Cost Lead Time Reduction Enhance the Management Structure
CASE STUDY 1
SPECTRA MOTORS LTD
INTRODUCTION AND INVENTORY MANAGEMENT
MARUTI SUZUKI INDIA LTD
MARUTI SUZUKI INDIA LTD
SPECTRA MOTOERS
LTD
SAI SERVICE AUTO VISTA
GOREGAON BORIVALI GHATKOPAR THANE
VITTESS
SPECTRA MOTORS LTD
LOCATION SPACE COST INSURANCE ALLOTEMENT OF VEHICLE
QUESTIONNARE
HOW THEY MANAGE THEIR INVENTORY STOCK?
WHAT ARE THEIR INVENTORIES?
WHO ARE THEIR SUPPLIERS?
WHAT SYSTEM DID THEY FOLLOW FOR MANAGING THEIR STOCK OF GOODS
CONTINUE…….
WHAT IS PDI SYSTEM ?
HOW MUCH COST THEY OCCURE FOR KEEPING THE INVENTORY?
HOW MANY PERSONEL EMPLOYED IN THEIR STOCKYARD?
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