The document discusses key concepts related to inventory management. It defines inventory and inventory systems, and describes different types of inventory like raw materials, work in process, and finished goods. It also discusses reasons for holding inventory, costs associated with inventory like holding and ordering costs, and methods for measuring and controlling inventory levels like economic order quantity and reorder point models. The document provides an overview of inventory management fundamentals.
Concept of inventory, need for inventory, types of inventory, Seasonal, Decoupling, Cyclic, Pipeline, Safety, Implications of Inventory Control Methods Inventory Costs: Concept & Behavior of Ordering cost, Carrying cost & Shortage cost Basic EOQ Model & EOQ with Discount
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Investitori e Manager: strategia comune orientata al processo. Questa presentazione (la versione italiana e prima in una serie di webinar da me tenuti in polacco nel mese di Ottobre 2013) si propone di indirizzare la spinta all'imprenditorialità e la necessità di management conseguente in un percorso di crescita continua che dia futuro all'azienda. Nell'esposizione ho cercato di portare esempi dalla mia stessa esperienza professionale di consulenza nell'ambito dei processi aziendali.
Organizzazione o improvvisazione- presentazione a Varsavia -05.09.2013- versi...Fabrizio Rotunno
Si tratta della versione italiana di una mia presentazione sul tema dell'approccio corretto all'implementazione di nuovi metodi e strumenti all'interno di un'azienda con particolare riferimento all'introduzione di sistemi informatici gestionali.
La presentazione originale (in polacco, link http://www.slideshare.net/fabriziorotunno9/organizacja-czy-improwizacja-fabrizio-rotunnosolint) è stata da me svolta a Varsavia il 05.09.2013 nell'ambito del convegno KSI sui Sistemi Informatici Integrati, presso l'Hotel Marriott Courtyard.
Concept of inventory, need for inventory, types of inventory, Seasonal, Decoupling, Cyclic, Pipeline, Safety, Implications of Inventory Control Methods Inventory Costs: Concept & Behavior of Ordering cost, Carrying cost & Shortage cost Basic EOQ Model & EOQ with Discount
********************************************************************************************************************************************************
"This e-Mail may contain proprietary and confidential information and is sentfor the intended recipient(s) only. If, by an addressing or transmission error,this mail has been misdirected to you, you are requested to delete this mailimmediately. You are also hereby notified that any use, any form of reproduction, dissemination, copying, disclosure, modification, distribution
and/or publication of this e-mail message,contents or ts attachment(s) other than by its intended recipient(s) is strictly prohibited. Any opinions expressed in this email are those of the individual and not necessarily of the organization. Before opening attachment(s), please scan for viruses."
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"This e-Mail may contain proprietary and confidential information and is sentfor the intended recipient(s) only. If, by an addressing or transmission error,this mail has been misdirected to you, you are requested to delete this mailimmediately. You are also hereby notified that any use, any form of reproduction, dissemination, copying, disclosure, modification, distribution
and/or publication of this e-mail message,contents or ts attachment(s) other than by its intended recipient(s) is strictly prohibited. Any opinions expressed in this email are those of the individual and not necessarily of the organization. Before opening attachment(s), please scan for viruses."
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Investitori e Manager: strategia comune orientata al processo. Questa presentazione (la versione italiana e prima in una serie di webinar da me tenuti in polacco nel mese di Ottobre 2013) si propone di indirizzare la spinta all'imprenditorialità e la necessità di management conseguente in un percorso di crescita continua che dia futuro all'azienda. Nell'esposizione ho cercato di portare esempi dalla mia stessa esperienza professionale di consulenza nell'ambito dei processi aziendali.
Organizzazione o improvvisazione- presentazione a Varsavia -05.09.2013- versi...Fabrizio Rotunno
Si tratta della versione italiana di una mia presentazione sul tema dell'approccio corretto all'implementazione di nuovi metodi e strumenti all'interno di un'azienda con particolare riferimento all'introduzione di sistemi informatici gestionali.
La presentazione originale (in polacco, link http://www.slideshare.net/fabriziorotunno9/organizacja-czy-improwizacja-fabrizio-rotunnosolint) è stata da me svolta a Varsavia il 05.09.2013 nell'ambito del convegno KSI sui Sistemi Informatici Integrati, presso l'Hotel Marriott Courtyard.
I recently spoke at Symbiosis University on how WCM (World Class Manufacturing) is being applied to the software industry.
World Class Manufacturing [WCM] is the collective term for the most effective methodologies and techniques to realize the objectives of: A) Products of consistent high quality B) Delivery on Time of the desired quantity and C) Product at the lowest cost. The commonly knows WCM methodologies and techniques are TPM, Kaizen, TQM, Six Sigma, JIT, and Lean Manufacturing.
This presentation shares how the software industry and been adopting many practices from the above techniques over the last decade.
Organizacja czy improwizacja Fabrizio Rotunno-solintFabrizio Rotunno
jak przygotować firmę do wdrożenia systemu zarządzania.
To jest tekst mojej prezentacji w trakcie Konferencji GigaCon KSI w Warszawie (Hotel Marriot Courtyard) w dniu 05.09.2013.
Moja prelekcja ma na cel pokazywać jak milne może być podejście do wdrożenia nowych narzędzi w organizacji firmy i jak ważne jest korzystać z wkładu zasobów ludzikch aby się stało kapytałem intelektualnym całej firmy.
Pokazuję również jak powinno być w praktyce właściwe podejście, które nazywam syntropiczne.
Raportowanie wykonanych prac za pomocą tego programu pozwoli:
Zarządzanie niezbędnymi parametrami istotnymi dla właściwego raportowania prac wewnątrz i poza zakładem pracy w jednym wspólnym zbiorze;
Rejestrowanie danych dot. raportowania wykonanych prac (w tym szczególnie prac selekcji i kontroli jakości);
Zarządzanie w/w danymi (edytowaniem, kasowaniem, integracją);
Zarządzanie dostępem i autoryzacją do oglądania, rejestrowania i edytowania poszczególnych rodzajów danych (kadry, jakość, finanse, itd.).
Ten program, po odpowiedniej parametryzacji, można stosować do:
Tworzenia raportów jakościowych/rozliczeniowych z klientem;
Zarządzania kosztami i zyskami wykonanych prac;
Aktualizowania raportu miesięcznego dot. godzin roboczych pracowników
Learn from the best companies how to achieve Best Practice & World Class systems and products from the company that delivers the national best practice programme in the UK Onsite Insights. Continuous Improvement models and ideas on how to create a framework that suits your business.
Professional Management Consulting in Poland "PALLADIUM"Fabrizio Rotunno
We are keen on helping investors manage their activities in Poland and Central Eastern Europe. Our experience and our skills are at Your disposition in case You would be interested in building Your structure, improve Your processes, control Your performances, simplify Your comunication.
To achieve success for Your company, You may be just a step far, please contact us.
Ulysses-NCM è un applicativo, sviluppato da Fabrizio Rotunno, per la gestione oggettiva e completa della documentazione relativa alle non conformità esterne ed interne.
In today’s worldwide competitive business environment, effective investment planning and partner selection is one of the key issues for companies which are planning investment in abroad. The purpose of study is to propose a selection system, will provide a comprehensive approach for selecting the best GSM operator for Call Center, is selling GSM operator’s prepaid minutes, investment. For this purpose, a literature review is performed about GSM. Then, extensive interviews have been carried out with authorized experts, and qualitative and quantitative decision factors have been defined for alternative regions, countries and GSM operators, which have been evaluated by using AHP respectively. Finally, by using developed evaluation formula, each alternative has been evaluated and, the best alternative GSM operator has been selected by using Goal Programming to investment, raw material cost, labor cost, profit and market share goals. In the conclusion of our study, the results have been discussed in detail and the future work is presented as well.
Defination : Inventories constitute an important component of a firms working capital .The various features of inventory are inventory as current asssets ,level of liquidity and liquidity lags .
Purpose : The purpose of holding inventoryis to achieve efficiency through cost reduction, increased sales volume ,to avail quantity discounts ,reduce risk of production stoppages ,reducing ordering costs and time .
Inventory Management techniques : 2 types :
1. Economic order quantity : it is the order quantity that minimisesthe total cost associated with inventory management .
2. 2. ABC system : A – items of high value but small in number
B – items of moderate value and size require reasonable attention
C - items of smaller value
Economic Order Quantity (EOQ) is the order quantity that minimizes total inventory costs. Total Inventory Costs Budgetary techniques for inventory planning
2. A-B-C. System of inventory control
3. Economic Order Quantity (E.O.Q.) i.e., how much to purchase at one time economically
4. VED Analysis
5. Perpetual inventory system and the system of store verification
6. Fixation of Stock Level
7. Control Ratios
2. Definitions
Inventory-A physical resource that a firm
holds in stock with the intent of selling it or
transforming it into a more valuable state.
Inventory System- A set of policies and
controls that monitors levels of inventory and
determines what levels should be maintained,
when stock should be replenished, and how
large orders should be
3. Inventory
Def. - A physical resource that a firm holds in
stock with the intent of selling it or
transforming it into a more valuable state.
Raw Materials
Works-in-Process
Finished Goods
Maintenance, Repair and Operating (MRO)
4. Expensive Stuff
The average carrying cost of inventory
across all mfg.. in the U.S. is 30-35% of
its value.
What does that mean?
Savings from reduced inventory result
in increased profit.
5. Zero Inventory?
Reducing amounts of raw materials and
purchased parts and subassemblies by
having suppliers deliver them directly.
Reducing the amount of works-in process
by using just-in-time production.
Reducing the amount of finished goods by
shipping to markets as soon as possible.
6. Inventory Positions in the
Supply Chain
Raw Works
Materials Finished Finished
in Goods Goods
Process in Field
7. Reasons for Inventories
Improve customer service
Economies of purchasing
Economies of production
Transportation savings
Hedge against future
Unplanned shocks (labor strikes, natural
disasters, surges in demand, etc.)
To maintain independence of supply chain
9. Nature of Inventory: Adding
Value through Inventory
Quality - inventory can be a “buffer” against poor
quality; conversely, low inventory levels may force
high quality
Speed - location of inventory has gigantic effect on
speed
Flexibility - location, level of anticipatory inventory
both have effects
Cost - direct: purchasing, delivery, manufacturing
indirect: holding, stockout.
HR systems may promote this-3 year postings
10. Nature of Inventory:
Functional Roles of Inventory
Transit
Buffer
Seasonal
Decoupling
Speculative
Lot Sizing or Cycle
Mistakes
11. Design of Inventory Mgmt.
Systems: Macro Issues
Need for Finished Goods Inventories
Need to satisfy internal or external customers?
Can someone else in the value chain carry the
inventory?
Ownership of Inventories
Specific Contents of Inventories
Locations of Inventories
Tracking
12. How to Measure Inventory
The Dilemma: closely monitor and control
inventories to keep them as low as possible
while providing acceptable customer service.
Average Aggregate Inventory Value:
how much of the company’s total assets
are invested in inventory?
Ford:6.825 billion
Sears: 4.039 billion
19. Independent Demand
Independent demand items are
finished products or parts that are
shipped as end items to customers.
Forecasting plays a critical role
Due to uncertainty- extra units must
be carried in inventory
20. Dependent Demand
Dependent demand items are raw
materials, component parts, or
subassemblies that are used to produce
a finished product.
MRP systems---next week
21. Design of Inventory Mgmt.
Systems: Micro Issues
Order Quantity
Economic Order Quantity
Order Timing
Reorder Point
22. Objectives of Inventory
Control
1) Maximize the level of customer
service by avoiding understocking.
2) Promote efficiency in production and
purchasing by minimizing the cost of
providing an adequate level of customer
service.
23. Balance in Inventory Levels
When should the company replenish its
inventory, or when should the company
place an order or manufacture a new
lot?
How much should the company order or
produce?
Next: Economic Order Quantity
24. Models for Inventory Management:
EOQ
EOQ minimizes the sum of holding and setup
costs
Q = 2DCo/Ch
D = annual demand
Co = ordering/setup costs
Ch = cost of holding one unit of inventory
25. Seatide
EOQ = 2DCo/Ch
D = annual demand = 6,000
Co = ordering/setup costs = $60
Ch = cost of holding one unit of inventory
$3.00 x 24% = .72
720,000
2 x 6,000 x 60 .72 1,000
.72
27. Reorder Point
Quantity to which inventory is allowed to drop
before replenishment order is made
Need to order EOQ at the Reorder Point:
ROP = D X LT
D = Demand rate per period
LT = lead time in periods
28. Sawtooth Model
level of inventory average
inventory
units
Q
t time
29. Q - System Inventory
Control
based on reorder point - When
inventory is depleted to ROP, order
replenishment of quantity EOQ.
30. Order Quantities
when demand is smooth and
continuous, can operate response-
based system by determining
best quantity to replenish periodic demand
(EOQ)
frequency of replenishment (ROP)
Reorder Point
31. Planning for Uncertainty
changing lead times
changing demand
Uncertainty creeps in:
Plug in safety stock
Safety stock - allows manager to
determine the probability of stock levels
- based on desired customer service
levels
33. Models for Inventory Management:
Quantity Discount
Basically EOQ with quantity discounts
To solve:
1. Write out the total cost equation
2. Solve EOQ at highest price and no discounts
3. If Qmin falls in a range with a lower price,
recalculate EOQ assuming holding cost for that
range. Call this Q2.
4. Evaluate the total cost equation at Q2 at the next
highest price break point.
OR Use a spreadsheet
34. P-System
Periodic Review Method
an alternative to ROP/Q-system control is
periodic review method
Q-system - each stock item reordered at
different times - complex, no economies of
scope or common prod./transport runs
P-system - inventory levels for multiple stock
items reviewed at same time - can be
reordered together
higher carrying costs - not optimum, but more
practical
35. Using P-System
audit inventory level at interval (T)
quantity to place on order is difference
between max. quantity (M) and amount
on hand at time of review
management task - set optimal T and M
to balance stock availability and cost
In ABC analysis, which items would use
P-system???
36. Types of Inventory Systems
By Degree of Control required
often use grouping method, such as ABC
37. Classifying Inventory Items
ABC Classification (Pareto Principle)
A Items: very tight control, complete and
accurate records, frequent review
B Items: less tightly controlled, good
records, regular review
C Items: simplest controls possible, minimal
records, large inventories, periodic review
and reorder
39. Planning Supply Chain
Activities
Anticipatory - allocate supply to each
warehouse based on the forecast
Response-based - replenish inventory
with order sizes based on specific
needs of each warehouse
40. Anticipatory Inventory
Control
determine requirements by forecasting
demand for the next production run or
purchase
establish current on-hand quantities
add appropriate safety stock based on
desired stock availability levels and
uncertainty demand levels
determine how much new production or
purchase needed (total needed - on-hand)
41. Response-Based System
replenishment, production, or purchases of
stock are made only when it has been
signaled that there is a need for product
downstream
requires shorter order cycle time, often more
frequent, lower volume orders
determine stock requirements to meet only
most immediate planning period (usually
about 3 weeks)
42. Service Level Achieved
•Item fill rate (IFR): the probability of filling
an order for 1 item from current stock
expected number of units out of stock/year
1-
total annual demand
•Weighted Average Fill Rate (WAFR): multiply
IFR for each stock item on an order weighted
by the ordering frequency for the item