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No 30


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No 30

  1. 1. HOW EFFICIENCY AND EFFECTIVENESS OF THE INVENTORY MANAGEMENT OF YOUR ORGANIZATION COULD BE IMPROVED USING MULTI-DIMENTIONAL, SELECTIVE INVENTORY CONTROL TECHNIQUES. Institute of Supply and Materials Management Diploma in Purchasing and Materials Management- 2008/2011 Batch Index No-30, Module-07 (Inventory Control Management)
  2. 2. Introduction <ul><li>The term “Inventory control” is used to mean is set of policies and procedures adopted by an organization to ensure that correct quality and quantity of materials are made available for its operations, with the minimum investment. Considering the economy in storage and ordering. </li></ul>
  3. 3. Introduction <ul><li>The proper management of inventory is a delicate maintenance of the balance of supply and demand, by maintaining the appropriate level of stock in a warehouse. Basically it is about keeping two things in mind: don't run out, and don't have too much. Having the delicate balance of supply and demand firmly mastered, is what effective inventory management is all about. </li></ul>
  4. 4. Inventory Control Systems <ul><li>Mainly inventory control system involves </li></ul><ul><li>Determining the item to be held in stock. </li></ul><ul><li>To decide the extent of the stock holding items. </li></ul><ul><li>Regulating the receipts. </li></ul><ul><li>Regulating the issues. </li></ul>
  5. 5. Inventory Control Systems <ul><li>The type of stock can influence how much you should keep? Mainly, inventory control system can divided to two parts. It is important that indicate the methods of inventory control. Those are as follows. </li></ul><ul><li>Basic inventory control system. </li></ul><ul><li>Selective inventory control system </li></ul>
  6. 6. Inventory Control Systems <ul><li>Basic inventory control system </li></ul><ul><li>There are main three types of inventory control under basic inventory control system. </li></ul><ul><li>Continuous review system or fixed order quantity system. </li></ul><ul><li>Cycle review system or period review system. </li></ul><ul><li>Programmed or planed ordering system. </li></ul><ul><li>(MRP 1 and MRP 2) </li></ul>
  7. 7. Inventory Control Systems <ul><li>Continuous review system or fixed order quantity system </li></ul><ul><li>In this system, the order review on quantity based. </li></ul><ul><li>Cycle review system or period review system </li></ul><ul><li>Inventory review on period based. </li></ul><ul><li>Programmed or planed ordering system </li></ul><ul><li>Programmed ordering system is MRP system of inventory control. (MRP 1 OR 2) </li></ul>
  8. 8. Inventory Control Systems <ul><li>Selective inventory control system </li></ul><ul><li>ABC Classification </li></ul><ul><li>HML Classification </li></ul><ul><li>XYZ Classification </li></ul><ul><li>VED Classification </li></ul><ul><li>FSN Classification </li></ul><ul><li>SDF Classification </li></ul><ul><li>GOLF Classification </li></ul><ul><li>SOS Classification </li></ul>
  9. 9. Inventory Control Systems <ul><li>Three dimensional inventory Control </li></ul><ul><li>This classification goes on categorizing under below categories. </li></ul><ul><li>High consumption value, Low consumption value </li></ul><ul><li>Long lead-time, Short lead-time </li></ul><ul><li>Critical, Non-Critical </li></ul>
  10. 10. How Efficiency and Effectiveness of these Inventory Systems ? <ul><li>Basically, following an inventory controlling system is to maintain an optimum size of inventory for efficient and smooth production and sales operations, to maintain a minimum investment in inventories to maximize the profitability, finally effort should be made to place an order at the right time with right source to acquire the right quantity at the right price and right quality. </li></ul>
  11. 11. How Efficiency and Effectiveness of these Inventory Systems ? <ul><li>The effectiveness of inventory control is directly measurable by, </li></ul><ul><li>How successful a company is in providing high levels of customer service </li></ul><ul><li>Low inventory investment. </li></ul><ul><li>Maximum throughput and low costs . </li></ul><ul><li>Even though, these measurable here to show the success of any kind of a inventory system. Now there are integrated & automated inventory systems showing their performance. </li></ul>
  12. 12. What is the Inventory System That We Use in A. Baur & Company? <ul><li>As an employee in A. Baur & Company I have the experience with IMAS of computer base system. Even though it is a computer based system it is a manual data entry system. Manually it has to be controlled. </li></ul>
  13. 13. Conclusion <ul><li>New innovations of inventory control system come up to solve these problems. Companies have been investing in integrated enterprise applications (such as ERP). so integrated and automated system is a requirement for an organization. </li></ul>