MGT 7133 Operations Management Lecture 5 ppt (2).pptx

Revew Content of Lecture 4:
 overview of human resource(HR)
 Understand how job expansion leads to job
enrichment and job enlargement
 Employee Reaction To work organisation and
Work Recognition
 Learn how work schedules are developed
 Comprehend the steps to develop standard time
for assembly line employees
 Learn how to develop production targets and
direct labour costs using standard time
 Comprehend how job-design works
 HR of the future
MAHSA MBA Lecture Series 2

Understand inventory

Content of Lecture 5:
 Understand the types of inventory.
 Learn how to manage inventory
 How to set re-order points and order quantities
 Obtain desired service levels
 Learn the challenges to handle inventory in
service industries
 The Future of Inventory Management

 Definition:
Inventory is defined as
goods held for sale in the
normal course of business
or items used in the
manufacture of products
that will be sold in the
normal course of
business.
 The inventory is recorded
on the balance sheet at
the lower of the cost or
the market value of the
inventory.
-by Google
Keeping track of your inventory can be a
pain, but it’s worth the time and energy when
you consider the benefits.
From inventory control in retail to checking
into the product line in warehouse
management
it’s easy to see that inventory is important
Consignmentinventory is the inventory
owned by the supplier/producer (generally a
wholesaler) but held by a customer
What is Inventory in Business
Benefits
 Inventory saves time & energy
 Inventory ensures an organised
warehouse
 Inventory can increase efficiency
 Inventory helps with accurate order
fulfilment
 Inventory tracks the stock of a business
 Inventory helps you stay profitable
 Inventory helps predict future sales
 Inventory helps with decision making
 Inventory is monitored with digital
solutions
 Inventory promises customer
satisfaction
 Inventory makes Operations
Management easier
Inventory is all the raw materials, work-in-progress and goods available
for sale that a company owns

Routine
Maintenance
, Repair &
Operations
Inventory

Denoting a manufacturing
system in which materials or
components are delivered
immediately before they are
required in order to minimize
storage costs
A minimum order quantity is
the fewest number of units
required to be purchased at
one time.
ABC analysis is a method of
categorization of inventory
based on significance and
importance of the items in the
production process which
determines the level of
inventory control.
First in, first out (FIFO) is an
inventory valuation method
that assumes a company first
sells the goods it purchases
or produces first.
Economic order quantity
(EOQ) is the ideal quantity of
units a company should
purchase to meet demand
while minimizing inventory
costs such as holding costs,
shortage costs, and order
costs.
Drop shipping is a retail
fulfillment method in which a
business doesn’t keep the
products it sells in stock.
a batch of goods destined
for or delivered to sthe
action of consigning or
delivering
somethingomeone,
Cross Docking Cross docking is a shipping
method that transfers goods from
one transportation mode to
another to get them directly from
the source to their destination.

Picturization of the Inventory Management Techniques

Inventories are assets (IAS 2.6)
helr sale in the ordinary course of business; or
in the process of production for such sale; or
in the form of materials or supplies to be consumed in the production
process or in the rendering of services.

Learn how to
manage inventory

 One of the most challenging
aspects of running a business is
learning how to effectively
manage your inventory so you
have what your customers need
and want without having too
much excess, which can be a
waste of money.
 Whether it's deciding what and
how much to order, when to
order, keeping an accurate count
of your products, or knowing how
to handle excess and shortages,
knowing how to control inventory
properly will help ensure your
business's success.
 What does it mean when a business
practices visual inventory
management? In simpler terms, this
indicates that a company is using a
system that allows them to truly see
what inventory they have on hand,
even across multiple locations.
 While traditional inventory
strategies—especially those
involving inventory lists or
spreadsheets—use alphanumeric
characters to sum up inventory and
stock levels, a truly visual inventory
system leans on words and photos to
catalog what items a business has on
hand.
A visual inventory management
system
How to effectively manage your
inventory

INVENTORY MANAGEMENT TECHNIQUES FOR
WHOLESALE BUSINESSES

How to Control Inventory - PART 1
Assessing Your Inventory
1. Understand the goals of any
inventory control system
2. Invest in inventory
management software
3. Create clear labels
4. Perform an initial count of
your inventory stock

Updating Your Inventory PART 1 -Cont.
Updating Your Inventory
5. Store the updated documents in an
organized manner
6. Advance to a point-of-sale (POS)
7. Manually update your inventory

Maintaining the Right Level of Inventory
1. Analyze sales data
3. Decide how much stock
to order and keep
2. Consider order and delivery times

Maintaining the Right Level of Inventory
1. Choose a re-order point
3. Consider using an outside inventory
management agency
2. Arrange to have some "safety stock" to
get you through shortages from
unexpected events

$
$
(Dollars)
$

A Items B Items C Items
C

Dollars
Dollars
$ $
$

(In Dollars)
CONCLUSION
 This research has found that DUST is
considered high among the inventory
 Management can expand godown for
storing inventory
 The sales and marketing department
of the firm should pay closer attention
to inventory usage
 Inventory problems can cause
business failures
 Inventory management techniques
help to determine the safety stock and
the minimum stock level
 By this way management can take
measures to invest in inventory to an
optimum.

How to set re-order points
and order quantities

Inventory Management vs. Supply
Chain Management
 Inventory management is a key element of supply
chain management, but the terms aren’t
interchangeable.
 Supply chain management oversees the flow of
products from raw goods and production sourcing
through final distribution.
 Inventory management deals with receiving, tracking
and storing the products you hold, plus provides data
for informed purchasing.
 For a small business or solopreneur, supply chain and
inventory management procedures easily meld
together.
 However, it’s important to know the distinctions as you
grow and begin delegating supply chain and inventory
tasks to staff or outside contractors.

2. Decide
How To
Track
Inventory
Data
3. Create an
Internal SKU
System
4. Organize
Inventory
Storage
Areas
5. Use
Forecasting
To Order
Inventory
6. Set Up
Inventory
Receiving
Procedures
7. Keep
Track of
Inventory
Levels
1. Define
Product
Sourcing
and Storage
Methods
How To Manage
Inventory Effectively

Obtain desired service levels

Introduction
we follow up with the operational and
inventory information that distributors
need to share with decision makers in
order to compete in today’s connected
world.
 Aging ERP systems simply cannot
deliver the depth of information
– consolidated from across
the organization
– to drive the fast, accurate
decisions that establish
confidence with customers
and win business.
 Reporting that only looks at what has
happened in the past leaves
managers in the dark, guessing about
how their decision will affect other
areas of the business.
We will look at how modern ERP will Manage inventory more
effectively:
1. Reduce inventory, maintain service levels
2. Improve materials requirements planning
3. Share inventory data with vendors and customers
4. Streamline the purchasing process
5. Improve warehouse management and
Improve operations
6. Improve service with accurate inventory data
7. Support growth without adding people
8. Increase employee productivity
9. Improve retailer supply processes
10. Accelerate cash flow
 This is a challenging and exciting time in distribution
 Through this, we hope to give you the inspiration to transform your
business.
 Modern ERP systems are more affordable than ever
and can give you the edge to compete and win.

Planning the Levels

Learn the challenges to handle
inventory in service industries

Overcoming Inventory Management challenges with loT and Analytics

The Future of Inventory Management

7.
Personalization
4. Distributed
inventory
management
3. Cloud-based
solutions
5. Predictive
picking
2. Artificial
intelligence
6. Success
strategies for
trend adoption
1.
Automated
Guided
Vehicles
(AGVs) &
Automated
Mobile Tobots
(AMRs)
Inventory Management
is Evolving!

14. Reporting
& analytics
11, Hybrid
warehousing &
shipping
10. 3PL
12. Omni-
channel
inventory
control
9.
Automation
13. Blockchain
8. Creative
financing
Inventory Management
is Evolving!

MGT 7133 Operations Management Lecture 5 ppt (2).pptx

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