This document provides an overview of inventory management systems. It defines key inventory management terms and concepts. The document describes the objectives and functional areas of inventory management. It outlines the integrated process of inventory management including data requirements, models, and relationships with other business functions and systems. Specific tools, roles, and responsibilities are also discussed.
Effective store keeping and successful inventory control.2Tajudeen Wahabi
Store keeping involves accounting for stock including raw materials, work-in-progress, finished goods, and some fixed assets. Materials are received through various modes of transportation and verified before being accounted for in stores. Different machines like forklifts and overhead cranes are used to carry and store heavy materials. Once materials are received, a goods receipt note is prepared to record the receipt and enable supplier payment. Materials are stored properly according to type in various stores and sub-stores for security, easy retrieval and handling. Inventory management aims to maintain adequate supply to meet demand while minimizing total costs of holding, ordering and shortage. Key terms include maximum limit, minimum limit, reorder level, and safety stock.
Role of Inventory is very important in any business operations without thinking of its size, structure and market value.
Inventory helps in smooth functioning of the business..
Store management involves receiving materials, protecting them from damage and unauthorized removal, issuing materials in the right quantities at the right time and place, and providing these services promptly and at lowest cost. The key functions of a store include receipt, storage, retrieval, issue, record keeping, housekeeping, control, surplus management, verification, and coordination with other departments. Stores can be organized as centralized or decentralized systems, with tradeoffs between control/efficiency and transportation/handling costs.
The document discusses stores management in hospitals. It covers key topics like the functions and importance of stores, factors to consider for location and layout of stores, storage methods, and codification of items. The main points are:
1. Stores play a vital role in hospital operations by providing supplies to user departments and ensuring uninterrupted services. Proper storage, inventory management, and issue of items are some core functions.
2. Important factors for stores location include proximity to user departments, volume and variety of goods, and accessibility. The layout should allow for easy movement of materials and optimal space utilization.
3. Codification involves representing each stored item with a unique code for identification. Various systems group items
Inventory control in hospitals aims to efficiently order and store just the right amount of supplies needed for patient cases while tracking costs. It involves classifying inventory into official and unofficial categories. The objectives of inventory control are to supply materials on time, reduce idle time by avoiding stockouts, and meet future demand. Selective inventory control involves grouping inventory and applying different levels of control based on item costs and importance through various classification methods like ABC analysis.
Inventory management involves controlling stock levels and maintaining costs. Different techniques are used like economic order quantity and ABC analysis to efficiently manage inventory levels. The document discusses key inventory management concepts like inventory types, associated costs, stock levels, and methods like just-in-time to reduce waste and increase efficiency.
This document discusses various aspects of managing medical stores and warehouses, including objectives, activities, design principles, systems, classification, storage, and handling of materials. The key points are:
1. The objectives of medical stores are to receive, store, and distribute materials to meet user demands while minimizing waste through proper inventory control and storage methods.
2. Effective materials management involves planning, purchasing, receiving, inventory control, standardization, and disposal. Computerized stock records and communications between facilities are important.
3. Proper warehouse design considers product movement, handling technology, storage plans, and future expansion. Classification systems and fixed, fluid, or semi-fluid location methods determine how items are organized within zones and
This document provides an overview of stores and materials management. It defines what a storehouse is and discusses the key functions and objectives of stores management, including efficient materials planning, purchasing, inventory control, quality assurance and maintaining good supplier relationships. It outlines the responsibilities of stores managers, such as maintaining low inventory levels while providing good service, identification and inspection of materials, issuing materials to users, and stock control. The duties of storekeepers are also summarized, like receiving, storing and issuing materials, and maintaining records. Finally, some common store documents like bin cards and store ledgers are described.
Effective store keeping and successful inventory control.2Tajudeen Wahabi
Store keeping involves accounting for stock including raw materials, work-in-progress, finished goods, and some fixed assets. Materials are received through various modes of transportation and verified before being accounted for in stores. Different machines like forklifts and overhead cranes are used to carry and store heavy materials. Once materials are received, a goods receipt note is prepared to record the receipt and enable supplier payment. Materials are stored properly according to type in various stores and sub-stores for security, easy retrieval and handling. Inventory management aims to maintain adequate supply to meet demand while minimizing total costs of holding, ordering and shortage. Key terms include maximum limit, minimum limit, reorder level, and safety stock.
Role of Inventory is very important in any business operations without thinking of its size, structure and market value.
Inventory helps in smooth functioning of the business..
Store management involves receiving materials, protecting them from damage and unauthorized removal, issuing materials in the right quantities at the right time and place, and providing these services promptly and at lowest cost. The key functions of a store include receipt, storage, retrieval, issue, record keeping, housekeeping, control, surplus management, verification, and coordination with other departments. Stores can be organized as centralized or decentralized systems, with tradeoffs between control/efficiency and transportation/handling costs.
The document discusses stores management in hospitals. It covers key topics like the functions and importance of stores, factors to consider for location and layout of stores, storage methods, and codification of items. The main points are:
1. Stores play a vital role in hospital operations by providing supplies to user departments and ensuring uninterrupted services. Proper storage, inventory management, and issue of items are some core functions.
2. Important factors for stores location include proximity to user departments, volume and variety of goods, and accessibility. The layout should allow for easy movement of materials and optimal space utilization.
3. Codification involves representing each stored item with a unique code for identification. Various systems group items
Inventory control in hospitals aims to efficiently order and store just the right amount of supplies needed for patient cases while tracking costs. It involves classifying inventory into official and unofficial categories. The objectives of inventory control are to supply materials on time, reduce idle time by avoiding stockouts, and meet future demand. Selective inventory control involves grouping inventory and applying different levels of control based on item costs and importance through various classification methods like ABC analysis.
Inventory management involves controlling stock levels and maintaining costs. Different techniques are used like economic order quantity and ABC analysis to efficiently manage inventory levels. The document discusses key inventory management concepts like inventory types, associated costs, stock levels, and methods like just-in-time to reduce waste and increase efficiency.
This document discusses various aspects of managing medical stores and warehouses, including objectives, activities, design principles, systems, classification, storage, and handling of materials. The key points are:
1. The objectives of medical stores are to receive, store, and distribute materials to meet user demands while minimizing waste through proper inventory control and storage methods.
2. Effective materials management involves planning, purchasing, receiving, inventory control, standardization, and disposal. Computerized stock records and communications between facilities are important.
3. Proper warehouse design considers product movement, handling technology, storage plans, and future expansion. Classification systems and fixed, fluid, or semi-fluid location methods determine how items are organized within zones and
This document provides an overview of stores and materials management. It defines what a storehouse is and discusses the key functions and objectives of stores management, including efficient materials planning, purchasing, inventory control, quality assurance and maintaining good supplier relationships. It outlines the responsibilities of stores managers, such as maintaining low inventory levels while providing good service, identification and inspection of materials, issuing materials to users, and stock control. The duties of storekeepers are also summarized, like receiving, storing and issuing materials, and maintaining records. Finally, some common store documents like bin cards and store ledgers are described.
Successful inventory management involves creating a purchasing plan that will ensure that items are available when they are needed (but that neither too much nor too little is purchased) and keeping track of existing inventory and its use.
This document discusses effective inventory management techniques. It begins by explaining the importance of inventory mapping to understand the reasons for inventory levels. Symbols are used to categorize different types of inventory such as matter of indiscipline, idle material, material not in flow, and trans-shipment points. The Toyota Production System's 3M model of muda, mura, and muri is introduced for identifying and reducing waste, imbalance, and overburden. Value stream mapping is described as a tool for reducing lead times and inventory across the supply chain. Store management responsibilities and techniques like rack reduction are covered to better control material movement and storage.
The document discusses stores organization and management. It describes different types of store systems like centralized stores, decentralized stores, and centralized stores with sub-stores. It highlights the advantages and disadvantages of each system. It also covers store classification, codification, stores ledger, and advantages of maintaining a stores ledger. Maintaining proper store records through classification, codification, and a stores ledger allows for better control, supervision and stock management.
The presentation outlines the objectives, key performance indicators (KPIs), and priority areas for the materials management department of a company. The department aims to maintain adequate stock levels while ensuring first-in-first-out issuing to avoid expiry and obsolescence. Key KPIs include maintaining a production materials inventory of over 4 weeks for local items and 8 weeks for imports. Priority areas include relocating and reorganizing the raw materials store and improving employee skills. The main challenge is harmonizing and unifying the entire materials stores.
Stores systems involve planning for materials needs through forecasting, periodic review of forecasts, and optimizing resources to efficiently meet actual needs. Efficiency is measured by stock turnover, meaning how quickly materials move through the stores. Stores encompass a wide variety of materials that require specialized storage, handling, and licensing depending on the product. The key responsibilities of stores personnel are to properly account for all received items, preserve materials until issue, and issue materials as demanded. Effective stores management has main functions of receiving, custody, inventory control, and disposal of materials.
Part of the induction course for students undertaking diploma and degree in environmental lab science, public health, Analytical Chemistry, Applied Biology, Medical Lab Sciences and Food Technology.
Stores management is part of the overall function of materials management. In order, therefore, to understand the function of the former it is desirable to have a clear understanding of what materials management stands for.
According to Alford and Beatty “storekeeping is that aspect of material control concerned with the physical storage of goods.” In other words, storekeeping relates to art of preserving raw materials, work-in-progress and finished goods in the stores.
SIM Unit 4
Store management :
Materials handling,
Flow of goods/FIFO,
Computerization of inventory transactions
Security of stores,
Stocking and technical impacts-
shelf life,
wastage,
pilferage
This document provides guidance on effective store and inventory management. It outlines key objectives and responsibilities of storekeepers including understanding inventory principles, record keeping, and maintaining stock levels. The document describes best practices for core warehouse activities such as stock receipt, storage, issuance and record keeping. It also discusses inventory control systems and how to assess stock status. The goal is to provide timely customer service while minimizing costs and protecting inventory through proper care, storage, and security of the warehouse and stock.
The document discusses store management and various aspects related to it. It defines store management and outlines key objectives like minimizing production costs and maintaining material value. It describes important store functions such as receipt, storage, retrieval, issue, records keeping, and control. It also discusses centralized and decentralized store models and factors affecting store layout. The overall purpose of store management is to receive, store and issue materials efficiently at lowest cost.
This document discusses inventory management. It defines inventory as physical resources held for sale or transformation. Inventory management refers to ordering, storing, and using raw materials, components, and finished goods. It involves ensuring the right types and quantities of items are available when needed through practices like perpetual inventory, setting stock levels, and physical inventory counts. Key goals are maintaining regular supply while avoiding overstocking or stockouts. The document outlines various forms and concepts used in inventory systems.
THIS PPT HELP STUDENT FOR THE JAVA BASED MINIPROJECT AND ALSO HELP TO PEOPLE WHO HAD A STORE OF GROCERY AND HELP TO MANAGED THEIR STORE THROUGH REFFER OF PPT
The document discusses store management. It defines a store as a place where excess materials are kept for future use. Store management aims to receive, protect, issue, and track materials efficiently and at low cost. The objectives of store management are to ensure uninterrupted supply of materials without delays, prevent overstocking and understocking, protect materials from damage, minimize storage costs, and maintain proper control of materials. Key functions of store management include receipt, storage, retrieval, issue, record keeping, housekeeping, control, surplus disposal, verification, packaging, and coordination with other departments.
Storekeeping involves the safekeeping and storage of goods and materials. There are two main types of storage: centralized storage in a single store for the whole organization, and decentralized storage with independent small stores attached to departments. The objectives of storekeeping are to prevent overstocking and understocking, protect materials from risks, minimize storage costs, ensure control over materials, and optimize storage space and workers. Key functions include receiving, storing, and providing information on materials availability by maintaining records. Duties of the storekeeper are to exercise control, ensure safekeeping of quality and quantity, maintain records, receive and issue materials, and check physical and book balances.
An inventory management system was developed for a global manufacturing company to help track parts for products across worldwide suppliers more efficiently. The custom database solution provides a centralized place for multiple buyers to view real-time inventory and delivery status updates. This helps reduce costs and informs decision-making by eliminating the use of spreadsheets and manual tracking processes.
Subject: Pharmaceutical Marketing and Management
Full Marks - 50
1. Personnel Management:
a) Definition, scope, importance, behavioral science and personnel management.
b) Motivation, moral and job satisfaction.
c) Education, training, management development and performance evaluation.
d) Means of achieving harmonious industrial relation collective bargaining, joint consultation worker council, arbitration, and industrial democracy.
2. Production Management: Definition, scope, importance and application of management, techniques and principles to production management, production planning and quality control.
3. Materials Management:
a) Purchasing: Formulating effective buying policies, determination of needs and desires of patrons, selecting the sources of supply, determination the terms of purchase, receiving, marketing and stocking goods.
b) Inventory control: Methods of inventory control, selection of optimum method, effect of inventory control.
4. Risks Management
5. Pharmaceutical Marketing:
a) Promotion: Objectives, classification, developing a promotional plan, promotion strategy, budget and executing the program. Steps of implantation of advertising, types (display, direct mail, etc.) and preparation of advertisement. Personal selling and evaluation of promotion (general and specialized method).
b) Pricing: General consideration, pricing method, prescription pricing and professional fees.
c) Channel of distribution
d) Forecasing of sales
5. Management of Community Pharmacy and Governmental Pharmacy.
Project we like welinkar by sayali mahajanSayaMahajan
Mr. Rajdeep Mhatre discussed his 33-year career in supply chain management, including his current role as Director of Supply Chain Management at CHEP. He described CHEP's operations in India and priorities around safety, customer value, and meeting expectations. Mr. Neelesh Talathi, CFO of Pepperfry.com, outlined his 20+ year career spanning finance roles in Asia, Africa, and the UK. Dr. Vinay Nayak, President of Alembic Pharmaceuticals, shared lessons from his career in quality and business leadership in the pharmaceutical industry, and his views on India's growing role in global pharmaceuticals.
Computer systems are now relied on for many business operations including warehousing and inventory control. In warehousing, computers can be used with rugged tablets, mobile barcode scanners, RFID technology, and vehicle-mounted computers to automate tasks like tracking inventory, processing orders, and managing warehouse flow. Inventory control systems also now often utilize computer software to track levels in real-time and automate reordering.
Inventory Management guides the success or failure of the Organization with out any aspect of its size of operations.
Inventory Management is about 45-90% of the organziation success role.
This document discusses key factors in organizing and managing a drug store, including site selection, inventory levels, storage conditions, and record keeping systems. It recommends considering population density, proximity to physicians and markets, traffic levels, and demographic factors when selecting a site. The document also outlines best practices for store layout and organization, inventory control methods like bin cards and perpetual inventory, different storage temperature categories, and references for further information.
Information System Concepts & Types of Information SystemsVR Talsaniya
Best slides on the information system concepts and to understand the types of information systems.
Best for the CA Final Students for Information System Control & Audit (ISCA) subject.
The document discusses different types of information systems used in organizations, including transaction processing systems, management information systems, decision support systems, executive support systems, and knowledge work systems. It describes how these systems integrate functions and business processes across departments like finance, human resources, manufacturing, and sales.
Successful inventory management involves creating a purchasing plan that will ensure that items are available when they are needed (but that neither too much nor too little is purchased) and keeping track of existing inventory and its use.
This document discusses effective inventory management techniques. It begins by explaining the importance of inventory mapping to understand the reasons for inventory levels. Symbols are used to categorize different types of inventory such as matter of indiscipline, idle material, material not in flow, and trans-shipment points. The Toyota Production System's 3M model of muda, mura, and muri is introduced for identifying and reducing waste, imbalance, and overburden. Value stream mapping is described as a tool for reducing lead times and inventory across the supply chain. Store management responsibilities and techniques like rack reduction are covered to better control material movement and storage.
The document discusses stores organization and management. It describes different types of store systems like centralized stores, decentralized stores, and centralized stores with sub-stores. It highlights the advantages and disadvantages of each system. It also covers store classification, codification, stores ledger, and advantages of maintaining a stores ledger. Maintaining proper store records through classification, codification, and a stores ledger allows for better control, supervision and stock management.
The presentation outlines the objectives, key performance indicators (KPIs), and priority areas for the materials management department of a company. The department aims to maintain adequate stock levels while ensuring first-in-first-out issuing to avoid expiry and obsolescence. Key KPIs include maintaining a production materials inventory of over 4 weeks for local items and 8 weeks for imports. Priority areas include relocating and reorganizing the raw materials store and improving employee skills. The main challenge is harmonizing and unifying the entire materials stores.
Stores systems involve planning for materials needs through forecasting, periodic review of forecasts, and optimizing resources to efficiently meet actual needs. Efficiency is measured by stock turnover, meaning how quickly materials move through the stores. Stores encompass a wide variety of materials that require specialized storage, handling, and licensing depending on the product. The key responsibilities of stores personnel are to properly account for all received items, preserve materials until issue, and issue materials as demanded. Effective stores management has main functions of receiving, custody, inventory control, and disposal of materials.
Part of the induction course for students undertaking diploma and degree in environmental lab science, public health, Analytical Chemistry, Applied Biology, Medical Lab Sciences and Food Technology.
Stores management is part of the overall function of materials management. In order, therefore, to understand the function of the former it is desirable to have a clear understanding of what materials management stands for.
According to Alford and Beatty “storekeeping is that aspect of material control concerned with the physical storage of goods.” In other words, storekeeping relates to art of preserving raw materials, work-in-progress and finished goods in the stores.
SIM Unit 4
Store management :
Materials handling,
Flow of goods/FIFO,
Computerization of inventory transactions
Security of stores,
Stocking and technical impacts-
shelf life,
wastage,
pilferage
This document provides guidance on effective store and inventory management. It outlines key objectives and responsibilities of storekeepers including understanding inventory principles, record keeping, and maintaining stock levels. The document describes best practices for core warehouse activities such as stock receipt, storage, issuance and record keeping. It also discusses inventory control systems and how to assess stock status. The goal is to provide timely customer service while minimizing costs and protecting inventory through proper care, storage, and security of the warehouse and stock.
The document discusses store management and various aspects related to it. It defines store management and outlines key objectives like minimizing production costs and maintaining material value. It describes important store functions such as receipt, storage, retrieval, issue, records keeping, and control. It also discusses centralized and decentralized store models and factors affecting store layout. The overall purpose of store management is to receive, store and issue materials efficiently at lowest cost.
This document discusses inventory management. It defines inventory as physical resources held for sale or transformation. Inventory management refers to ordering, storing, and using raw materials, components, and finished goods. It involves ensuring the right types and quantities of items are available when needed through practices like perpetual inventory, setting stock levels, and physical inventory counts. Key goals are maintaining regular supply while avoiding overstocking or stockouts. The document outlines various forms and concepts used in inventory systems.
THIS PPT HELP STUDENT FOR THE JAVA BASED MINIPROJECT AND ALSO HELP TO PEOPLE WHO HAD A STORE OF GROCERY AND HELP TO MANAGED THEIR STORE THROUGH REFFER OF PPT
The document discusses store management. It defines a store as a place where excess materials are kept for future use. Store management aims to receive, protect, issue, and track materials efficiently and at low cost. The objectives of store management are to ensure uninterrupted supply of materials without delays, prevent overstocking and understocking, protect materials from damage, minimize storage costs, and maintain proper control of materials. Key functions of store management include receipt, storage, retrieval, issue, record keeping, housekeeping, control, surplus disposal, verification, packaging, and coordination with other departments.
Storekeeping involves the safekeeping and storage of goods and materials. There are two main types of storage: centralized storage in a single store for the whole organization, and decentralized storage with independent small stores attached to departments. The objectives of storekeeping are to prevent overstocking and understocking, protect materials from risks, minimize storage costs, ensure control over materials, and optimize storage space and workers. Key functions include receiving, storing, and providing information on materials availability by maintaining records. Duties of the storekeeper are to exercise control, ensure safekeeping of quality and quantity, maintain records, receive and issue materials, and check physical and book balances.
An inventory management system was developed for a global manufacturing company to help track parts for products across worldwide suppliers more efficiently. The custom database solution provides a centralized place for multiple buyers to view real-time inventory and delivery status updates. This helps reduce costs and informs decision-making by eliminating the use of spreadsheets and manual tracking processes.
Subject: Pharmaceutical Marketing and Management
Full Marks - 50
1. Personnel Management:
a) Definition, scope, importance, behavioral science and personnel management.
b) Motivation, moral and job satisfaction.
c) Education, training, management development and performance evaluation.
d) Means of achieving harmonious industrial relation collective bargaining, joint consultation worker council, arbitration, and industrial democracy.
2. Production Management: Definition, scope, importance and application of management, techniques and principles to production management, production planning and quality control.
3. Materials Management:
a) Purchasing: Formulating effective buying policies, determination of needs and desires of patrons, selecting the sources of supply, determination the terms of purchase, receiving, marketing and stocking goods.
b) Inventory control: Methods of inventory control, selection of optimum method, effect of inventory control.
4. Risks Management
5. Pharmaceutical Marketing:
a) Promotion: Objectives, classification, developing a promotional plan, promotion strategy, budget and executing the program. Steps of implantation of advertising, types (display, direct mail, etc.) and preparation of advertisement. Personal selling and evaluation of promotion (general and specialized method).
b) Pricing: General consideration, pricing method, prescription pricing and professional fees.
c) Channel of distribution
d) Forecasing of sales
5. Management of Community Pharmacy and Governmental Pharmacy.
Project we like welinkar by sayali mahajanSayaMahajan
Mr. Rajdeep Mhatre discussed his 33-year career in supply chain management, including his current role as Director of Supply Chain Management at CHEP. He described CHEP's operations in India and priorities around safety, customer value, and meeting expectations. Mr. Neelesh Talathi, CFO of Pepperfry.com, outlined his 20+ year career spanning finance roles in Asia, Africa, and the UK. Dr. Vinay Nayak, President of Alembic Pharmaceuticals, shared lessons from his career in quality and business leadership in the pharmaceutical industry, and his views on India's growing role in global pharmaceuticals.
Computer systems are now relied on for many business operations including warehousing and inventory control. In warehousing, computers can be used with rugged tablets, mobile barcode scanners, RFID technology, and vehicle-mounted computers to automate tasks like tracking inventory, processing orders, and managing warehouse flow. Inventory control systems also now often utilize computer software to track levels in real-time and automate reordering.
Inventory Management guides the success or failure of the Organization with out any aspect of its size of operations.
Inventory Management is about 45-90% of the organziation success role.
This document discusses key factors in organizing and managing a drug store, including site selection, inventory levels, storage conditions, and record keeping systems. It recommends considering population density, proximity to physicians and markets, traffic levels, and demographic factors when selecting a site. The document also outlines best practices for store layout and organization, inventory control methods like bin cards and perpetual inventory, different storage temperature categories, and references for further information.
Information System Concepts & Types of Information SystemsVR Talsaniya
Best slides on the information system concepts and to understand the types of information systems.
Best for the CA Final Students for Information System Control & Audit (ISCA) subject.
The document discusses different types of information systems used in organizations, including transaction processing systems, management information systems, decision support systems, executive support systems, and knowledge work systems. It describes how these systems integrate functions and business processes across departments like finance, human resources, manufacturing, and sales.
Strategic Information System For Competitive AdvanceNguyen Tung
1) 7-Eleven Japan invested $200 million to build an advanced information system to better understand customer needs, track inventory levels, and electronically transmit orders between distribution centers and vendors.
2) The information system allowed 7-Eleven Japan to optimize product selection in each store twice a day based on customer demand, allocate shelf space efficiently, and track employee performance.
3) In contrast, 7-Eleven in the US filed for bankruptcy in the 1990s due to a lack of customer focus and ineffective information systems. 7-Eleven Japan was able to greatly increase profits through its strategic use of information technology.
This document discusses strategic information systems and guidelines for strategic control. It defines strategic information systems as computer systems that help organizations examine market and competitor information to plan business strategies. It also describes guidelines for effective strategic control, including minimizing information monitored, timely controls, focusing on meaningful activities, and using both long and short term controls.
The document discusses the six main types of information systems and their roles and relationships. It describes transaction processing systems, management information systems, decision support systems, knowledge work systems, office automation systems, and executive support systems. It provides examples of each type of system and explains their typical inputs, processing, outputs, users, and strategic roles within an organization.
An information system consists of 5 main components: 1) Computer hardware which includes the physical parts of a computer system like processors, memory, and input/output devices. 2) Computer software which are instructions that control the computer's operation and can be system software or application software. 3) Telecommunications which refers to electronic transmission of information over networks like LANs and WANs. 4) Databases which are organized collections of related data managed by database management systems. 5) Human resources and procedures which involve the people who use the system and the outlined processes for interacting with hardware, software, and databases.
This document discusses strategic uses of information systems. It begins by explaining the need for a strategic perspective on IS and how IS can help redefine a company's business model, create new products and services, or transform existing processes. It then covers strategies and tactics for competitive markets, including competitive systems, forces, and analyzing a company's value chain for strategic opportunities. Specific examples of customer-oriented and supplier-oriented strategic systems are provided.
Concepts and components of information systemRohit Kumar
The document discusses concepts related to information systems. It defines a system as having inputs, processing, and outputs. It describes the key components of an information system including people, hardware, software, data, and networks. It also discusses different types of computer systems such as microcomputers, midrange systems, and mainframe systems. Peripherals and storage technologies like semiconductor memory, magnetic disks, tapes, and optical disks are also summarized.
System concepts, elements and types of systems pptShobhit Sharma
A system is composed of interrelated components that work together toward a common goal. It accepts inputs, transforms them through a process, and produces outputs. For example, the human body is a system with parts like the head, heart, and limbs that work interdependently to achieve the goal of living.
A management information system provides managers with tools to organize, evaluate, and manage departments efficiently. It includes software, databases, hardware, and processes to support operational control, management control, and decision-making. MIS provides past, present, and predictive information to aid efficient department administration and decision support.
This document summarizes key concepts around business strategy from a textbook on strategic management. It discusses strategic business units, Porter's three generic strategies of cost leadership, differentiation, and focus. It provides examples of companies using each strategy and explores combining strategies. Graphics are included to illustrate concepts like economies of scale, the strategy clock, and mapping differentiation. The overall focus is on how organizations develop competitive advantages through business-level strategic choices.
The document discusses different types of information systems including transaction processing systems, management information systems, decision support systems, and executive support systems. It provides details on each type, including their characteristics, objectives, examples, and how they support different levels of management within an organization. The key types discussed are transaction processing systems which handle routine business transactions, management information systems which provide reports to middle management, decision support systems which support analysis for decision making, and executive support systems which are tailored for senior executive use.
Jonathan Lee, Managing Director, Brand Strategy, and Ken Allard, Managing Director, Business Strategy at HUGE, gave this presentation at "Ambidexterity 2," the VCU Brandcenter's Executive Education program for account planning on June 24th at the VCU Brandcenter in Richmond, VA.
This document provides an overview of Walmart's business strategy. It discusses Walmart's cost leadership strategy through aggressive pricing, maintaining prices 20% lower than competitors. Walmart is able to generate surplus profits through large volumes sold, which are reinvested in facilities. The document also outlines Walmart's marketing strategies of tailoring merchandise and store experience to customer needs. It discusses using customer data and RFID tags to improve inventory management and reduce costs. Overall, the document summarizes that Walmart founder Sam Walton placed customers and quality at the forefront of the business strategy, which has led to Walmart becoming a model of success.
This document provides an overview of key concepts from a textbook on business strategy for accountants. It covers definitions of strategy, levels of strategy from corporate to operational, the Exploring Strategy model for analyzing an organization's strategic position, choices and implementation. Learning outcomes are presented for each section, which focus on strategy formulation and analysis using various frameworks like PESTEL, Porter's five forces, and strategic groups. The document aims to help readers understand strategic management concepts and apply different lenses to analyze strategies in various organizational contexts.
The document provides an overview of management information systems (MIS). It defines key concepts such as data, information, and systems. It explains that an MIS is a system for collecting, processing, storing, and distributing data to managers within an organization. The main outputs of an MIS are scheduled reports, key indicator reports, demand reports, and exception reports. These help managers monitor performance and make decisions. Overall, the document serves as an introduction to MIS, covering essential elements like the relationship between data, information, and systems.
This document provides an overview of supply chain management concepts. It discusses inventory management, including types of inventory, functions of inventory, tracking inventory using SKU and UPC codes, inventory costs, and selective inventory controls like ABC analysis. It also covers lean manufacturing, planning methods like replenishment order point and economic order quantity, forecasting techniques, and procurement. The document is divided into 7 chapters that briefly explain these various supply chain management topics.
The document discusses the implementation of a Warehouse Management System (WMS) by a student named Anwar Al Bayali under the supervision of Prof. John Soldatos and co-supervisor Nikolaos Kefalakis. The WMS aims to optimize warehouse processes such as receiving, put-away, order picking, and shipping. It provides benefits such as improved customer service, increased productivity, lower inventory costs, and better revenue realization for the organization. The student's thesis will involve designing the system database and classes, using technologies like MySQL and JavaServer Pages, and developing the WMS graphical user interface.
Bill Generator and Inventory MaintenanceIRJET Journal
This document describes a bill generator and inventory maintenance system created by students for a paper manufacturing company. The system has 6 modules: 1) a bill generator to create and maintain bill details, 2) a print bill module to convert bills to PDF format, 3) a view bills module to see customer purchase histories, 4) an inventory module to track stock levels and locations, 5) a backup inventory module to archive inventory data, and 6) an alert module to notify users when inventory levels change. The system aims to provide centralized inventory management and billing to help optimize stock levels and pricing strategies.
Warehouse Management in Microsoft Dynamics NAV 2013Gerardo Renteria
This document provides an overview of warehouse management in Microsoft Dynamics NAV 2013. It describes the basic and advanced levels of warehousing functionality available and the key concepts and processes involved, including inbound, internal, and outbound item flows; warehouse setup and configuration including bins, zones, and locations; and integration with inventory management. The document is intended to explain the design and principles behind the warehouse management features in NAV 2013.
Inventory management refers to the process of ordering, storing, using, and selling a company's inventory, including raw materials, components, and finished products. It aims to have the right amount of inventory to meet customer needs without overinvesting, and involves demand planning, determining optimal inventory levels, inventory tracking and control, and periodic counting.
This document provides an overview of inventory control. It defines inventory as physical stock of goods or materials kept by an organization. Inventory control aims to manage inventory movement from procurement to finished goods in an efficient manner. The objectives of inventory control are to meet demand and smooth production fluctuations at minimum cost. Inventories are classified as direct materials, work-in-process, finished goods, spare parts, and indirect materials. Common inventory control systems discussed include periodic review systems, fixed order quantity systems, ABC analysis, and economic order quantity models.
Inventory Management and Control, Production Planning and ControlSimranDhiman12
This document provides an overview of inventory management, production planning, and control. It discusses key objectives like minimizing costs and ensuring adequate supply. Inventory management techniques include ABC analysis, VED analysis, EOQ, lead time, and buffer stock. Production planning determines facility requirements and layout, while production control monitors plan execution and addresses deviations. The perpetual inventory system uses bin cards, store ledgers, and continuous stock taking to regularly check and prevent stockouts.
Telco Construction Equipment Company (TELCON) manages its supply chain through strategic, tactical, and operational activities. At the strategic level, this includes network optimization and supplier partnerships. Tactical activities involve sourcing, production planning, and transportation. Operational activities include planning, sourcing, production, fulfillment, and performance tracking across the supply chain on a daily basis. An integrated supply chain management approach aims to deliver the right products to customers at the lowest cost by streamlining processes and information sharing between partners.
The document defines inventory and types of inventory. It discusses inventory in manufacturing which includes raw materials, work in progress, and finished goods. It also discusses inventory classification according to function such as fluctuation inventory, anticipation inventory, lot size inventory, transportation inventory, and protective inventory. The advantages of inventory include improved production, obtaining materials in economical lot sizes, meeting customer demand, and preventing shortages. The disadvantages are maintenance costs, capital costs, storage and handling costs, taxes, and obsolescence. Effective inventory management includes establishing optimal inventory levels, tracking costs such as holding, ordering, and stockout costs, and using ABC classification to focus on the most important inventory items.
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This document discusses challenges with inventory management and emerging solutions using big data analytics. Effective inventory control balances meeting customer needs while keeping inventory levels as low as possible. However, inventory management is complicated by conflicting objectives within companies and unpredictable supply and demand. New inventory optimization tools use big data from ERP systems to more accurately analyze trends, forecast demand, and recommend optimal inventory levels and replenishment schedules to reduce costs while maintaining customer satisfaction. These tools help companies better balance the trade-offs between avoiding stock-outs and overstocking.
This document discusses inventory management. It defines inventory and explains that inventory management involves determining optimal stock levels while balancing carrying costs, replenishment lead times, and demand forecasting. The document then provides more details on types of inventory, reasons for keeping stock, variables that affect inventory problems, classifications of inventory models, and deterministic inventory models like the economic order quantity model.
This document discusses inventory control and management. It defines inventory as the stock of any item or resource used in an organization, including raw materials, finished products, and work-in-process items. Inventory is necessary to meet demand, smooth production requirements, decouple production stages, protect against stock-outs, and take advantage of economic order quantities. The document outlines different inventory control techniques, such as ABC classification, FSN classification, and VED classification to effectively manage inventory levels. It also discusses reorder points, order quantities, and costs associated with ordering inventory.
Inventory & Inventory Management ( By BU AIS 2nd Batch)Jessic Sharif
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Inventory management involves balancing the costs of holding inventory with the benefits. It refers to controlling and tracking materials, work in process, and finished goods. The goals are to maintain optimal inventory levels to meet demand while minimizing costs. Effective inventory management requires specifying order quantities, reorder points, and controlling inventory across all stages and locations.
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1. Inventory Management System
Section Table of Contents
1. INVENTORY MANAGEMENT.............................................................................................4
1.1. INTRODUCTION TO INVENTORY MANAGEMENT.....................................................4
1.1.1. DEFINITION..........................................................................................................4
1.1.2. SCOPE..................................................................................................................6
1.1.3. MISSION...............................................................................................................7
1.1.4. OBJECTIVES........................................................................................................8
1.1.5. FUNCTIONAL AREAS..........................................................................................9
1.1.6. INTEGRATED INVENTORY MANAGEMENT SYSTEM.....................................10
1.1.7. SMC DISCIPLINE INTERFACES........................................................................11
1.1.8. INVENTORY MANAGEMENT DISCIPLINES AND INTERFACES.....................13
1.2. PROCESS DESCRIPTION..........................................................................................14
1.2.1. NETWORK..........................................................................................................14
1.2.2. SYSTEM.............................................................................................................14
1.2.3. INVENTORY MANAGEMENT PROCESS..........................................................14
1.2.4. INVENTORY MANAGEMENT FLOW.................................................................16
1.3. PROCESS FLOW........................................................................................................17
1.3.1. 1. NON-CONTROLLED ACR ENTRY:................................................................17
1.3.2. 2. CONTROLLED ACR ENTRY:.........................................................................17
1.3.3. IMPLEMENTATION OF INVENTORY MANAGEMENT......................................18
1.3.4. SYSTEM ENVIRONMENT..................................................................................18
1.3.5. NETWORK ENVIRONMENT..............................................................................19
1.3.6. DATA REQUIREMENTS FOR INVENTORY MANAGEMENT............................19
1.3.7. INVENTORY MANAGEMENT DATA MODEL....................................................20
1.3.8. COLLECTING, MONITORING AND REPORTING DATA...................................25
1.3.9. INVENTORY MANAGEMENT RECORD HIERARCHY...................................25
1.4. DISCIPLINE RELATIONSHIPS...................................................................................27
1.4.1. BUSINESS FUNCTION INTERFACES...............................................................27
1.4.2. SYSTEM MANAGEMENT INTERFACES...........................................................29
1.5. INVENTORY MANAGEMENT TOOLS........................................................................30
1.5.1. ASSET MANAGEMENT AT THE SYSTEM TO SERVER LEVEL.......................30
1.5.2. INDUSTRY STANDARDS..................................................................................31
1.5.3. DOWNSTREAM NETWORK SERVER CONFIGURATION AND INVENTORY
MANAGEMENT..................................................................................................................34
1.6. ROLES AND RESPONSIBILITIES..............................................................................36
2. 1.6.1. INVENTORY MANAGER....................................................................................36
1.6.2. INVENTORY CLERKS........................................................................................36
1.7. PROCESS EVALUATION...........................................................................................37
1.7.1. PRESENT SYSTEM WEAKNESSES..................................................................37
1.7.2. RECOMMENDATIONS FOR IMPROVEMENT...................................................37
3. Section List of Figures
FIGURE 1. ASSET MANAGEMENT PHASES AND OPERATIONS........................................................4
FIGURE 2: OVERVIEW OF INVENTORY MANAGEMENT FUNCTIONAL AREAS.........................19
FIGURE 3: OVERVIEW OF AN INTEGRATED INVENTORY MANAGEMENT SYSTEM................33
FIGURE 4: SMC DISCIPLINE INTERFACES ..........................................................................................45
FIGURE 5: INVENTORY MANAGEMENT SYSTEM - OVERVIEW OF PROCESS.....................118
FIGURE 6: INVENTORY SYSTEM FLOW DIAGRAM......................................................................131
FIGURE 7: INVENTORY MANAGEMENT DATA MODEL..............................................................221
FIGURE 8: INVENTORY MANAGEMENT RECORD HIERARCHY................................................325
FIGURE 9: ASSET MANAGEMENT AT THE SYSTEM TO SERVER LEVEL............................424
FIGURE 10: DOWNSTREAM NETWORK SERVER AND INVENTORY MANAGEMENT.........472
Inventory means goods and materials, or those goods and materials themselves, held
available in stock by a business. This word is also used for a list of the contents of a
household and for a list for testamentary purposes of the possessions of someone who has
died. In accounting, inventory is considered an asset.
In business management, inventory consists of a list of goods and materials held available
in stock.
Inventory refers to the stock of resources, that possess economic value, held by an
organization at any point of time. These resource stocks can be manpower, machines,
capital goods or materials at various stages.
Inventory management is primarily about specifying the size and placement of stocked
goods. Inventory management is required at different locations within a facility or within
multiple locations of a supply network to protect the regular and planned course of
production against the random disturbance of running out of materials or goods. The
scope of inventory management also concerns the fine lines between replenishment lead
time, carrying costs of inventory, asset management, inventory forecasting, inventory
valuation, inventory visibility, future inventory price forecasting, physical inventory,
available physical space for inventory, quality management, replenishment, returns and
defective goods and demand forecasting. Balancing these competing requirements leads
to optimal inventory levels, which is an on-going process as the business needs shift and
react to the wider environment.
Inventory management involves a retailer seeking to acquire and maintain a proper
merchandise assortment while ordering, shipping, handling, and related costs are kept in
check.
Systems and processes that identify inventory requirements, set targets, provide
replenishment techniques and report actual and projected inventory status.
4. Handles all functions related to the tracking and management of material. This would
include the monitoring of material moved into and out of stockroom locations and the
reconciling of the inventory balances. Also may include ABC analysis, lot tracking, cycle
counting support etc.
Management of the inventories, with the primary objective of determining/controlling
stock levels within the physical distribution function to balance the need for product
availability against the need for minimizing stock holding and handling costs
1.1.1. The reasons for keeping stock
There are three basic reasons for keeping an inventory:
1. Time - The time lags present in the supply chain, from supplier to user at every
stage, requires that you maintain certain amounts of inventory to use in this "lead
time."
2. Uncertainty - Inventories are maintained as buffers to meet uncertainties in
demand, supply and movements of goods.
3. Economies of scale - Ideal condition of "one unit at a time at a place where a user
needs it, when he needs it" principle tends to incur lots of costs in terms of
logistics. So bulk buying, movement and storing brings in economies of scale,
thus inventory.
All these stock reasons can apply to any owner or product stage.
• Buffer stock is held in individual workstations against the possibility that the
upstream workstation may be a little delayed in long setup or change over time.
This stock is then used while that changeover is happening. This stock can be
eliminated by tools like SMED.
These classifications apply along the whole Supply chain, not just within a facility or
plant.
Where these stocks contain the same or similar items, it is often the work practice to hold
all these stocks mixed together before or after the sub-process to which they relate. This
'reduces' costs. Because they are mixed up together there is no visual reminder to
operators of the adjacent sub-processes or line management of the stock, which is due to
a particular cause and should be a particular individual's responsibility with inevitable
consequences. Some plants have centralized stock holding across sub-processes, which
makes the situation even more acute.
1.1.2. [edit] Special terms used in dealing with inventory
• Stock Keeping Unit (SKU) is a unique combination of all the components that are
assembled into the purchasable item. Therefore, any change in the packaging or
product is a new SKU. This level of detailed specification assists in managing
inventory.
5. • Stockout means running out of the inventory of an SKU.[1]
• "New old stock" (sometimes abbreviated NOS) is a term used in business to refer
to merchandise being offered for sale that was manufactured long ago but that has
never been used. Such merchandise may not be produced anymore, and the new
old stock may represent the only market source of a particular item at the present
time.
1.1.3. Typology
1. Buffer/safety stock
2. Cycle stock (Used in batch processes, it is the available inventory, excluding
buffer stock)
3. De-coupling (Buffer stock that is held by both the supplier and the user)
4. Anticipation stock (Building up extra stock for periods of increased demand - e.g.
ice cream for summer)
5. Pipeline stock (Goods still in transit or in the process of distribution - have left the
factory but not arrived at the customer yet)
1.1.4. Inventory examples
While accountants often discuss inventory in terms of goods for sale, organizations -
manufacturers, service-providers and not-for-profits - also have inventories (fixtures,
furniture, supplies, ...) that they do not intend to sell. Manufacturers', distributors', and
wholesalers' inventory tends to cluster in warehouses. Retailers' inventory may exist in a
warehouse or in a shop or store accessible to customers. Inventories not intended for sale
to customers or to clients may be held in any premises an organization uses. Stock ties up
cash and, if uncontrolled, it will be impossible to know the actual level of stocks and
therefore impossible to control them.
While the reasons for holding stock were covered earlier, most manufacturing
organizations usually divide their "goods for sale" inventory into:
• Raw materials - materials and components scheduled for use in making a product.
• Work in process, WIP - materials and components that have begun their
transformation to finished goods.
• Finished goods - goods ready for sale to customers.
• Goods for resale - returned goods that are salable.
For example:
1.1.4.1.[edit] Manufacturing
A canned food manufacturer's materials inventory includes the ingredients to form the
foods to be canned, empty cans and their lids (or coils of steel or aluminum for
constructing those components), labels, and anything else (solder, glue, ...) that will form
part of a finished can. The firm's work in process includes those materials from the time
of release to the work floor until they become complete and ready for sale to wholesale or
retail customers. This may be vats of prepared food, filled cans not yet labeled or sub-
assemblies of food components. It may also include finished cans that are not yet
6. packaged into cartons or pallets. Its finished good inventory consists of all the filled and
labeled cans of food in its warehouse that it has manufactured and wishes to sell to food
distributors (wholesalers), to grocery stores (retailers), and even perhaps to consumers
through arrangements like factory stores and outlet centers.
Examples of case studies are very revealing, and consistently show that the improvement
of inventory management has two parts: the capability of the organisation to manage
inventory, and the way in which it chooses to do so. For example, a company may wish
to install a complex inventory system, but unless there is a good understanding of the role
of inventory and its perameters, and an effective business process to support that, the
system cannot bring the necessary benefits to the organisation in isolation.
Typical Inventory Management techniques include Pareto Curve ABC Classification[2]
and Economic Order Quantity Management. A more sophisticated method takes these
two techniques further, combining certain aspects of each to create The K Curve
Methodology[3]. A case study of k-curve[4] benefits to one company shows a successful
implementation.
Unnecessary inventory adds enormously to the working capital tied up in the business, as
well as the complexity of the supply chain. Reduction and elimination of these inventory
'wait' states is a key concept in Lean[5]. Too big an inventory reduction too quickly can
cause a business to be anorexic. There are well-proven processes and techniques to assist
in inventory planning and strategy, both at the business overview and part number level.
Many of the big MRP/and ERP systems do not offer the necessary inventory planning
tools within their integrated planning applications.
1.2. Principle of inventory proportionality
1.2.1. Purpose
Inventory proportionality is the goal of demand-driven inventory management. The
primary optimal outcome is to have the same number of days' (or hours', etc.) worth of
inventory on hand across all products so that the time of runout of all products would be
simultaneous. In such a case, there is no "excess inventory," that is, inventory that would
be left over of another product when the first product runs out. Excess inventory is sub-
optimal because the money spent to obtain it could have been utilized better elsewhere,
i.e. to the product that just ran out.
The secondary goal of inventory proportionality is inventory minimization. By
integrating accurate demand forecasting with inventory management, replenishment
inventories can be scheduled to arrive just in time to replenish the product destined to run
out first, while at the same time balancing out the inventory supply of all products to
make their inventories more proportional, and thereby closer to achieving the primary
goal. Accurate demand forecasting also allows the desired inventory proportions to be
dynamic by determining expected sales out into the future; this allows for inventory to be
in proportion to expected short-term sales or consumption rather than to past averages, a
much more accurate and optimal outcome.
7. Integrating demand forecasting into inventory management in this way also allows for the
prediction of the "can fit" point when inventory storage is limited on a per-product basis.
1.2.2. Applications
The technique of inventory proportionality is most appropriate for inventories that remain
unseen by the consumer. As opposed to "keep full" systems where a retail consumer
would like to see full shelves of the product they are buying so as not to think they are
buying something old, unwanted or stale; and differentiated from the "trigger point"
systems where product is reordered when it hits a certain level; inventory proportionality
is used effectively by just-in-time manufacturing processes and retail applications where
the product is hidden from view.
One early example of inventory proportionality used in a retail application in the United
States is for motor fuel. Motor fuel (e.g. gasoline) is generally stored in underground
storage tanks. The motorists do not know whether they are buying gasoline off the top or
bottom of the tank, nor need they care. Additionally, these storage tanks have a maximum
capacity and cannot be overfilled. Finally, the product is expensive. Inventory
proportionality is used to balance the inventories of the different grades of motor fuel,
each stored in dedicated tanks, in proportion to the sales of each grade. Excess inventory
is not seen or valued by the consumer, so it is simply cash sunk (literally) into the ground.
Inventory proportionality minimizes the amount of excess inventory carried in
underground storage tanks. This application for motor fuel was first developed and
implemented by Petrolsoft Corporation in 1990 for Chevron Products Company. Most
major oil companies use such systems today.[6]
1.2.3. Roots
The use of inventory proportionality in the United States is thought to have been inspired
by Japanese just-in-time (business) parts inventory management made famous by Toyota
Motors in the 1980s
1.3. High-level inventory management
It seems that around 1880[7] there was a change in manufacturing practice from
companies with relatively homogeneous lines of products to vertically integrated
companies with unprecedented diversity in processes and products. Those companies
(especially in metalworking) attempted to achieve success through economies of scope -
the gains of jointly producing two or more products in one facility. The managers now
needed information on the effect of product-mix decisions on overall profits and therefore
needed accurate product-cost information. A variety of attempts to achieve this were
unsuccessful due to the huge overhead of the information processing of the time.
However, the burgeoning need for financial reporting after 1900 created unavoidable
pressure for financial accounting of stock and the management need to cost manage
products became overshadowed. In particular, it was the need for audited accounts that
sealed the fate of managerial cost accounting. The dominance of financial reporting
8. accounting over management accounting remains to this day with few exceptions, and the
financial reporting definitions of 'cost' have distorted effective management 'cost'
accounting since that time. This is particularly true of inventory.
Hence, high-level financial inventory has these two basic formulas, which relate to the
accounting period:
1. Cost of Beginning Inventory at the start of the period + inventory purchases
within the period + cost of production within the period = cost of goods available
2. Cost of goods available − cost of ending inventory at the end of the period = cost
of goods sold
The benefit of these formulae is that the first absorbs all overheads of production and raw
material costs into a value of inventory for reporting. The second formula then creates the
new start point for the next period and gives a figure to be subtracted from the sales price
to determine some form of sales-margin figure.
Manufacturing management is more interested in inventory turnover ratio or average
days to sell inventory since it tells them something about relative inventory levels.
Inventory turnover ratio (also known as inventory turns) = cost of goods sold /
Average Inventory = Cost of Goods Sold / ((Beginning Inventory + Ending
Inventory) / 2)
and its inverse
Average Days to Sell Inventory = Number of Days a Year / Inventory Turnover
Ratio = 365 days a year / Inventory Turnover Ratio
This ratio estimates how many times the inventory turns over a year. This number tells
how much cash/goods are tied up waiting for the process and is a critical measure of
process reliability and effectiveness. So a factory with two inventory turns has six months
stock on hand, which is generally not a good figure (depending upon the industry),
whereas a factory that moves from six turns to twelve turns has probably improved
effectiveness by 100%. This improvement will have some negative results in the financial
reporting, since the 'value' now stored in the factory as inventory is reduced.
Whilst these accounting measures of inventory are very useful because of their
simplicity, they are also fraught with the danger of their own assumptions. There are, in
fact, so many things that can vary hidden under this appearance of simplicity that a
variety of 'adjusting' assumptions may be used. These include:
• Specific Identification
• Weighted Average Cost
• Moving-Average Cost
• FIFO and LIFO.
9. Inventory Turn is a financial accounting tool for evaluating inventory and it is not
necessarily a management tool. Inventory management should be forward looking. The
methodology applied is based on historical cost of goods sold. The ratio may not be able
to reflect the usability of future production demand, as well as customer demand.
Business models, including Just in Time (JIT) Inventory, Vendor Managed Inventory
(VMI) and Customer Managed Inventory (CMI), attempt to minimize on-hand inventory
and increase inventory turns. VMI and CMI have gained considerable attention due to the
success of third-party vendors who offer added expertise and knowledge that
organizations may not possess.
1.3.1. Role of inventory accounting
By helping the organization to make better decisions, the accountants can help the public
sector to change in a very positive way that delivers increased value for the taxpayer’s
investment. It can also help to incentivise progress and to ensure that reforms are
sustainable and effective in the long term, by ensuring that success is appropriately
recognized in both the formal and informal reward systems of the organization.
To say that they have a key role to play is an understatement. Finance is connected to
most, if not all, of the key business processes within the organization. It should be
steering the stewardship and accountability systems that ensure that the organization is
conducting its business in an appropriate, ethical manner. It is critical that these
foundations are firmly laid. So often they are the litmus test by which public confidence
in the institution is either won or lost.
Finance should also be providing the information, analysis and advice to enable the
organizations’ service managers to operate effectively. This goes beyond the traditional
preoccupation with budgets – how much have we spent so far, how much do we have left
to spend? It is about helping the organization to better understand its own performance.
That means making the connections and understanding the relationships between given
inputs – the resources brought to bear – and the outputs and outcomes that they achieve.
It is also about understanding and actively managing risks within the organization and its
activities.
1.3.2. FIFO vs. LIFO accounting
Main article: FIFO and LIFO accounting
When a merchant buys goods from inventory, the value of the inventory account is
reduced by the cost of goods sold (COGS). This is simple where the CoG has not varied
across those held in stock; but where it has, then an agreed method must be derived to
evaluate it. For commodity items that one cannot track individually, accountants must
choose a method that fits the nature of the sale. Two popular methods that normally exist
are: FIFO and LIFO accounting (first in - first out, last in - first out). FIFO regards the
first unit that arrived in inventory as the first one sold. LIFO considers the last unit
arriving in inventory as the first one sold. Which method an accountant selects can have a
10. significant effect on net income and book value and, in turn, on taxation. Using LIFO
accounting for inventory, a company generally reports lower net income and lower book
value, due to the effects of inflation. This generally results in lower taxation. Due to
LIFO's potential to skew inventory value, UK GAAP and IAS have effectively banned
LIFO inventory accounting.
1.3.3. Standard cost accounting
Standard cost accounting uses ratios called efficiencies that compare the labour and
materials actually used to produce a good with those that the same goods would have
required under "standard" conditions. As long as similar actual and standard conditions
obtain, few problems arise. Unfortunately, standard cost accounting methods developed
about 100 years ago, when labor comprised the most important cost in manufactured
goods. Standard methods continue to emphasize labor efficiency even though that
resource now constitutes a (very) small part of cost in most cases.
Standard cost accounting can hurt managers, workers, and firms in several ways. For
example, a policy decision to increase inventory can harm a manufacturing manager's
performance evaluation. Increasing inventory requires increased production, which
means that processes must operate at higher rates. When (not if) something goes wrong,
the process takes longer and uses more than the standard labor time. The manager
appears responsible for the excess, even though s/he has no control over the production
requirement or the problem.
In adverse economic times, firms use the same efficiencies to downsize, rightsize, or
otherwise reduce their labor force. Workers laid off under those circumstances have even
less control over excess inventory and cost efficiencies than their managers.
Many financial and cost accountants have agreed for many years on the desirability of
replacing standard cost accounting. They have not, however, found a successor.
1.3.4. Theory of constraints cost accounting
Eliyahu M. Goldratt developed the Theory of Constraints in part to address the cost-
accounting problems in what he calls the "cost world." He offers a substitute, called
throughput accounting, that uses throughput (money for goods sold to customers) in place
of output (goods produced that may sell or may boost inventory) and considers labor as a
fixed rather than as a variable cost. He defines inventory simply as everything the
organization owns that it plans to sell, including buildings, machinery, and many other
things in addition to the categories listed here. Throughput accounting recognizes only
one class of variable costs: the truly variable costs, like materials and components, which
vary directly with the quantity produced.
Finished goods inventories remain balance-sheet assets, but labor-efficiency ratios no
longer evaluate managers and workers. Instead of an incentive to reduce labor cost,
throughput accounting focuses attention on the relationships between throughput
11. (revenue or income) on one hand and controllable operating expenses and changes in
inventory on the other. Those relationships direct attention to the constraints or
bottlenecks that prevent the system from producing more throughput, rather than to
people - who have little or no control over their situations.
1.4. National accounts
Inventories also play an important role in national accounts and the analysis of the
business cycle. Some short-term macroeconomic fluctuations are attributed to the
inventory cycle.
1.5. Distressed inventory
Also known as distressed or expired stock, distressed inventory is inventory whose
potential to be sold at a normal cost has passed or will soon pass. In certain industries it
could also mean that the stock is or will soon be impossible to sell. Examples of
distressed inventory include products that have reached their expiry date, or have reached
a date in advance of expiry at which the planned market will no longer purchase them
(e.g. 3 months left to expiry), clothing that is defective or out of fashion, and old
newspapers or magazines. It also includes computer or consumer-electronic equipment
that is obsolete or discontinued and whose manufacturer is unable to support it. One
current example of distressed inventory is the VHS format.[8]
In 2001, Cisco wrote off inventory worth US $2.25 billion due to duplicate orders [9]. This
is one of the biggest inventory write-offs in business history.
1.6. Inventory credit
Inventory credit refers to the use of stock, or inventory, as collateral to raise finance.
Where banks may be reluctant to accept traditional collateral, for example in developing
countries where land title may be lacking, inventory credit is a potentially important way
of overcoming financing constraints. This is not a new concept; archaeological evidence
suggests that it was practiced in Ancient Rome. Obtaining finance against stocks of a
wide range of products held in a bonded warehouse is common in much of the world. It
is, for example, used with Parmesan cheese in Italy.[10] Inventory credit on the basis of
stored agricultural produce is widely used in Latin American countries and in some Asian
countries.[11] A precondition for such credit is that banks must be confident that the stored
product will be available if they need to call on the collateral; this implies the existence of
a reliable network of certified warehouses. Banks also face problems in valuing the
inventory. The possibility of sudden falls in commodity prices means that they are
usually reluctant to lend more than about 60% of the value of the inventory at the time of
the loan
Inventory Management System
12. The system integrates the idea to manage the inventory automatically, meanwhile it can
generate sales report, inventory report, etc. To users, the system can provide instant
information about all inventory items. Therefore users who manage stock level can
immediately solve any shortage problems, since the system provides easy-to-use interface
for users to see inventory levels. By recording daily sales, the system updates inventory
constantly with the help of database management system running as the back end.
System Architecture:
For more information, kindly send us your enquires through our Consulting Requisition
form and we will reply accordingly. Thank you.
Inventory Management System/ Supply Chain Management System
World biggest Pan Masala Manufacturer wants a solution to control the following area,
• Control heavy routine business transaction
• Supply chain maintenance
• Fund maintenance
• Complex MIS
• Large Business Data
An integrated software solution provided by us to them. Replacement of old software with new one and
conversion of data to a world standard RDBMS (Oracle). The solution was a GUI interface with end user in Visual
Basic as front and ORACLE as back end DBMS. Crystal Reports was used to display / view complex MIS as well as
daily operational reports, ready to be exported in any file format. Adoption of new technology helps management
to transmit information over internet with no time. Cash flow / Fund flow maintenance has become easier now.
This gives a tool to management for making complex business decisions in less time span and ultimate result was
cut in production and maintenance cost.
1. 1. Inventory Management
13. 1.1. 1.1. Introduction to Inventory Management
1.1.1. 1.1.1. Definition
Inventory Management is an enterprise-wide discipline concerned with the identification
and tracking of Information Services (IS) hardware and software assets. Its three main
areas of concern are:
Acquisition.
Redeployment.
Termination.
Can be sorted by: Equipment Type,
Disposition, and Location
Pick-Up List
Equip. Type: Disp: Location:
PC A Bldg 3, Rm 203
Start PC R Bldg 1, Rm 405
PC T Bldg 2, Rm 501
Disposition = ‘A’
Acquire Purchase Install Add to Master
Equipment Order Equipment Master Inventory Inventory
Equipment is being Actively used
Disposition = ‘R’ N, Exceptions List Generated
Re-deploy Compare to Y
Work Pick-Up Warehouse
Master Inventory
Equipment Order Inventory Inventory
Equipment is moved to new location
Perform Service
Services Order
Disposition = ‘T’
Terminate Work Service Ready-to-Sell Purchase Release Finance
Equipment Order Order Order Form Form
Inventory
Equipment is Sold or Disposed of Marketing & Sales
End Archive
Figure 1. Asset Management phases and operations
Acquisition procedures are established to assist personnel in procurement of software
and hardware products. Its main purpose is to ensure that proper justifications are
performed and that financial guidelines are followed. Acquisitions require “Purchase
Orders” to track and authorize the purchase, while the actual installation of equipment is
performed by the Infrastructure or Facilities Management Department. Once added to
14. the environment, a Master Inventory record is created to describe the newly added
equipment and its components (i.e., Pentium IV PC with 512 MB or RAM, a 40 GB Hard
Drive, CD Drive, Floppy Drive, Sound and Video Cards, a 56 KB Modem and a 10/100
Ethernet Connection, etc.). Inventory records can be used to calculate the resale price of
existing equipment, when planning for an upgrade / replacement or reduction in size.
The Inventory Report can be used to inform buyers of your stock and obtain bids on the
purchase of your surplus equipment.
Redeployment procedures are responsible for ensuring that assets are tracked when
moved from one location to another and that budgetary considerations are adjusted as
needed. Should a product be moved in from its original owner, then the Inventory
System is updated to reflect the new location and owner. In this case, the old product is
deleted from the original owner's budget and added to the new owner's budget. If
equipment is being deployed from one person, or location, to another, then a data wipe
operation must be performed to insure that sensitive business, personal and/or medical
information has been deleted. If data wiping procedures are not performed in accordance
to Department of Defense standards, then the company is open to legal and civil penalties
as defined in a number of laws (i.e., Sarbanes-Oxley, Gramm-Leach-Bliley, HIPAA)
Redeployment requests can generate transportation activity (pick-up and delivery of
equipment), facilities management activity (disconnecting device, data wipe,
reconnecting device, etc.), inventory management update, and service activities
associated with the device(s) being moved.
Termination is responsible for deleting the asset from the inventory when it is
discontinued, or replaced. The owner's budget will be updated to reflect the asset
termination and the asset will no longer be listed when location reports are generated.
Whenever equipment is being terminated (even if for donation to charities or employees)
a data wipe operation must be performed to eliminate any sensitive information from the
hard drive. Additionally, a certified vendor must be utilized to insure that the computers
components are disposed of in an environemtally friendly manner. This scrapping
process must be certified, so that legal and civil penalties are no longer the responsibility
of the terminating firm but rather the scrapping organization.
The Inventory System is maintained within a data base that ties an asset to its owner and
defines the location where the asset resides. The relative importance of the asset is
added to the inventory record in a Criticality field (i.e., Criticality = 1-5, where 1 is "Most
Critical") and the current status of the equipment is indicated via a status field (A=Active,
R=Redeploying, D=Donated, T=Terminated, etc.). Based on this information the
contingency planning specialist can plan asset recoveries needed to support critical
business operations and the facilities management group can schedule work events
associated with equipment status changes (i.e., from A to R, or A to T, or A to D, etc.).
Like all data bases, the Inventory System will only be effective if its information is kept
current. To ensure the accuracy of the Inventory System, while not adding too great a
burden to company personnel, every effort must be taken to implement processes that
maintain inventory data with a minimum work effort from personnel. To that end, we
15. suggest automated form tied to equipment status and criticality changes, so that facilities
management and business continuity planning can adjust their functions accordingly.
Inventory Management provides:
Up-to-date information about data processing resources through the creation and
archiving of records in a centralized repository.
Financial records specific to a single component, or groups of components.
Component Status Indicators to identify a component as Active (A), Redeployed
(R ), Donated (D), or Terminated (T).
Component Criticality definition (1-5, with 1 being most critical).
Service records for all components in the inventory.
Data used to support configuration diagrams of the hardware and software
components contained within specific locations, or the entire data processing
environment.
Reports can be generated from the Inventory and Asset Management Systems that
would project the amount of revenue that can be generated through the sale of surplus
equipment, or to define the number of components that have a criticality rating of ‘1’
so that you can project the costs associated with maintaining duplicates of critical
equipment at reovery sites. Combining the two reports would allow you to reroute
equipment being scheduled for termination to the Recovery Facility and eliminate the
additional costs associated with purchasing duplicate equipment in support of
recovery needs.
16. 1.1.2. 1.1.2. Scope
The Inventory Management discipline encompasses all system and data network elements
from the mainframe to the server level throughout the enterprise.
All mainframe and data network based hardware and software assets must be identified
and entered into the Inventory System. Any changes to these environments must be
reflected in the Inventory System.
Financial and technical product information must be available through the Inventory
System, as needed to support the functional responsibilities of personnel within the
finance and contracts management departments.
Asset criticality must be included with asset descriptive and financial information, so that
the Recovery Management department is supplied with the information it requires.
Recovery actions must be implemented to safeguard critical assets.
Asset status must be included in the Inventory Management system, so that the
component(s) can be serviced in adherence to legal, environmental, business, and
industry requirements. This process should be used to drive the facilities management
department via form routing when components change status from active to redeploy,
donate, terminate, of scrap. An audit trail of activities associated with equipment status
changes and associated actions must be maintained to certify actions and eliminate legal
and civil exposures.
The Standards and Procedures Manual section relating to Inventory Management must be
created and published. This section must describe the process by which assets are
identified, entered into the Inventory Management System, tracked, and finally deleted.
All information needed by personnel to perform Inventory Management functions must
be clearly described within this S&P Manual section.
17. 1.1.3. 1.1.3. Mission
The mission of an Inventory System is to provide a Central Asset Repository of
information used to define assets and relate the asset to its; owner, location, and relative
importance. This information will provide personnel with data needed to support their
job functions, for example:
Facilities Management will be able to plan Heating, Ventilation and Air
Conditioning (HVAC) requirements, as well as power and floor space needed to
support equipment listed in Asset Repository for a specific location. To also perform
the functions needed to adhere to legal, environmental, business, and regulatory
requirements associated with equipment redeployment and termination.
Financial Services will be able to budget for asset procurement, depreciate assets
over time, and complete tax documents. A report of equipment and their resale value
can be used to aid in planning equipment upgrades and to reduce the “Total Cost of
Ownership” associated with equipment.
Contracts Management will be able to negotiate vendor discounts and enterprise
agreements. Additional vendor agreements may be required to support transportation
and warehousing, equipment service and reconfiguration requirements, data wipe
services and products, buyers, and scrap dealers.
Contingency Planning personnel will be able to develop recovery plans for
mainframe and office assets contained within the Inventory System, based on the
assets relative importance (as stated within the Criticality field). Surplus equipment
may be utilized to support recovery operations, if needed.
Technical personnel will be able to resolve problems more quickly with the
information contained within the Inventory System, because they will have a listing
of the assets contained within a location.
The Inventory System should be integrated within the everyday functions performed by
personnel associated with entering and maintaining asset information. The system will
reduce the effort devoted to asset management, while supplying many personnel with the
information they need to perform their functional responsibilities.
18. 1.1.4. 1.1.4. Objectives
The objective of Inventory Management is to manage the physical and logical properties
of I/S resources and their relationship, while ensuring that service level commitments are
achieved. This process will:
Ensure efficient and timely identification of vital corporate assets.
Assist in managing the enterprise-wide inventory.
Provide a common repository for asset protection.
Plan and control the proliferation of assets across the enterprise.
The objectives of Inventory Management are:
To identify and track all data processing assets in an Inventory System
Repository.
To define the process by which assets are identified and maintained in the
Inventory System.
To provide Inventory System access to all necessary personnel (data entry,
update and deletion).
To provide a full range of reports that will satisfy informational
requirements.
To document the Inventory Management System within the Standards and
Procedures Manual.
To provide training to personnel responsible for supporting the Inventory
Management System.
19. 1.1.5. 1.1.5. Functional Areas.
The functional areas that interface with an Inventory Management System are:
Inventory Management Departments “ Inventory Management is divided into
many separate areas of responsibility.”
Finance
Inventory Management
Contracts
Mainframe Mid-Range PC / LAN Communications Fixed Assets
Voice Data Network
Hardware
Software
Facilities Common areas of concern
faced by each department
Vendor
Financial
Figure 2: Overview of Inventory Management functional areas.
All of the functional areas listed above can utilize the information contained within the
Inventory Management System's Central Asset Repository of information. Additionally,
the Recovery Management area could utilize inventory information to identify an assets
criticality (especially when the asset's location and owner are identified within the
Inventory Management System). Through the use of reports generated from the
Inventory Management System's Repository, it would be possible to obtain a listing of all
"Most Critical" resources, by location and group. This report would then serve as the
basis of a Business Recovery Plan.
20. 1.1.6. 1.1.6. Integrated Inventory Management System
To successfully implement an Inventory Management System, it is necessary to integrate
it within the everyday functions performed by company personnel. That is, when a user
wants to order equipment or software, they would call up the Inventory Management
System screen associated with Acquisition. The same types of processes should be
available for Redeployment and Termination of assets. Should a user request the
acquisition of a specific type of asset, then it could be possible for the inventory system
to determine if the asset is already in surplus, or if it should be purchased under an
existing Volume Purchase Agreement with a vendor.
Inventory Management
Process Flow User’s make requests for resources
(either hardware, software, or fixed
assets such as furniture). To ensure
USER USER accuracy of Inventory, all requests
must be via system connected
terminal.
Inventory Management
Inventory Control Financial Management
Management
Financial profile of inventory is
Inventory of assets is controlled by the
provided to Financial Management,
Inventory Control Manager.
who recommend purchasing techniques
Enterprise design agreements are
Reports that will result in discounts (i..e.,
validated by this person, who also Repository Volume Purchase Agreements, or
ensures that all asset guidelines are
specific vendors).
adhered to.
Hardware,
Software,
Fixed Assets, All reports deemed
by Location necessary to support
and Criticality system and informational
requests.
Figure 3: Overview of an integrated Inventory Management System.
The utilization of Inventory Management Systems to control the purchase and installation
of assets can aid in the control of the business environment, while assisting in the
assignment of personnel to perform asset related work functions. This methodology will
result in a work-flow and asset management system.
21. 1.1.7. 1.1.7. SMC Discipline Interfaces
The Systems Management and Controls disciplines that will interface with the Inventory
Management System are illustrated within the diagram listed below.
SMC Organization
Systems Management
and Controls (SMC)
Batch Service Level Recovery Change
Management Management Management Management
Inventory EDP Security Problem
On-Line Management Management Management
Management
Configuration
Management Vital Records
Management
Capacity
Management
Performance
Management
Figure 4: SMC Discipline Interfaces .
The disciplines interfacing directly with Inventory Management and their functional
responsibilities are:
Capacity Management (i.e., PC memory and speed, DASD size, etc.).
Performance Management (speed and usage information).
Change Management (version and release information, benchmark, testing, etc.).
Recovery Management (recovery planning for critical assets and sizing
requirements for recovery facilities).
22. Service Level Management (Service Level Definitions - SLD's and Service
Level Reporting - SLR of user processing and service requirements).
Problem Management (troubleshooting, pathway, version and release
information, etc.).
Configuration Management (hardware, software, location, HVAC requirements,
power, water, floor space, etc.).
23. 1.1.8. 1.1.8. Inventory Management disciplines and interfaces
The Inventory Management function is responsible for tracking all assets, from
Mainframe based to Data Network based, that are connected to the data center or data
network. In each case, the Inventory Management Systems must be able to:
Identify the asset and its serial number;
Associate the asset with its owner and location;
Relate the asset to its vendor; and
Track the maintenance level of the asset.
The ideal Inventory Management System should also:
Provide financial information related to an asset;
Define the criticality of the asset; and
Supply history information for the asset.
The Inventory Management System interfaces with the following departments:
Finance;
Contracts;
Systems Software;
Production Services; and
Facilities Management.
24. 1.2. 1.2. Process Description
The process of Inventory Management receives input from Systems Management
Controls (SMC) disciplines and other functions within the I/S organization as well as
other areas throughout the enterprise.
The vehicle used to control the Inventory Management discipline is Change
Management. Without adequate Change Management the integrity of an Inventory
Management process cannot be ensured. These SMC disciplines and functions
encompass both system and data network elements and feed the Configuration
Management discipline.
Inventory Management inputs can come from either the Network or System area and can
include a variety of input methods:
1.2.1. 1.2.1. Network
The Network area must account for new acquisitions installed into the
configuration. Because the complexity of today’s networks makes tracking new
acquisitions difficult, it is advisable that tracking be accomplished through the use
of discovery type applications which monitor and interrogate asset changes
automatically. This type of tracking would capture vital product data (VPD), or
perform product identification which is generally imbedded on PC-type products
by the manufacturer.
1.2.2. 1.2.2. System
Within the system area changes to the physical environment are systematically
reported through the integrated change process. This discipline incorporates all
hardware and software reconfigurations or updates. All inputs to the centralized
data base will be subject to the change process.
The following page contains an overview of the Inventory Management process.
1.2.3. 1.2.3. Inventory Management Process
25. PROCESS INPUTS:
Service Level Management, Capacity and Performance Management,
Change Management, Problem Management, Batch Management,
On-Line Management, Recovery Management
New Asset Asset Network System
Acquisition Re-Deployment Termination Alert Re-Configuration
Data Center Record, System Management
System Record, Assurance Process To
Hardware Record, Inventory
Repository Configuration
Software Record, Management
Service Record, Data Base
Financial Record.
R/O R/W Reports
Hard Copy, or
On-Line Viewing Add / Delete / Edit via on-line Display
Figure 5: Inventory Management System - Overview of Process
The above provides an Overview Diagram of the Inventory Management process, while
the following illustration provides a Flow Diagram of the Inventory Process.
26. 1.2.4. 1.2.4. Inventory Management Flow
SMC
No Create
Disciplines Data Center No Generate
Data Financials
Record Physical
Center ?
? Inventory
Non-Controlled Record
Reports
Entry Yes Yes
Controlled
Entry
System No Create
Record System Financial No Create
Unformatted
Generate ? Record Record Financial
Asset
Change Yes ? Record
Request
Record
Yes
Create
Validate Hardware Generate
Validate
Data Software Financial
Data
Elements Record Reports
Elements
Create
Yes
No Yes Features Features Close Change
Accepted No
? Record Record
? Formatted?
Authorized? No
Yes
Does Config. Yes
Update
Change
Configuration
?
Data Base Generate
Physical
No
Configuration
Reports
Figure 6: Inventory System Flow Diagram
27. 1.3. 1.3. Process Flow.
The process is entered as a Controlled or Non-Controlled Asset Change Request
(ACR) as follows:
1.3.1. 1.3.1. 1. Non-Controlled ACR Entry:
ACR received by any method other than the Change Control process.
- Confirm all necessary information is available about the asset.
- Request is reviewed locally for acceptance.
- Problems documented and returned for resolution.
- ACR accepted and authorized.
- Request forwarded to Change Control process for input as a Controlled
ACR.
1.3.2. 1.3.2. 2. Controlled ACR Entry:
Validate all data elements are present in the Change Record.
Review by all I/S organizations accountable for asset control.
Problems documented and returned for resolution.
ACR accepted and authorized.
Update Inventory Repository data base.
Create data center record associated with the asset.
Create system record associated with the asset.
Create component record associated with the asset.
Create feature records associated with the asset.
Generate physical configuration reports and distribute.
Create financial records if appropriate.
Generate financial reports if appropriate.
Generate physical inventory reports and distribute.
Close the change record.
28. 1.3.3. 1.3.3. Implementation of Inventory Management
Efficient processing and operations management start with an integrated approach
that links all facets of system management together. Inventory Management is
just one of the disciplines. Each augments the other, and provides the ability to
effectively manage a large systems environment.
Accurate inventory data is vital. A lack of such data affects the other Systems
Management disciplines ability to function. The automated element of inventory
management monitors the enterprise-wide data network processing environment
for change, while the system environment relies on the change process (which
may or may not be fully automated) for accurate input.
The products and tools that comprise the Inventory Management System use data
network definition information, Vital Product Data, local configuration definitions
and in some cases, discovery applications to arrive at inventory information.
This process must embrace the following areas to be effective:
1.3.4. 1.3.4. System Environment
Today the system programmer can define hardware configurations for multiple
MVS/ESA operating systems through Hardware Configuration Definition (HCD).
HCD reduces complexity and shortens the time required to successfully define an
I/O configuration by providing a panel-driven interface, panel defaults, and data
entry validity checking.
Dynamic reconfiguration management allows the support organization to
implement system configuration changes without interrupting system service.
System availability is increased by eliminating the need for an IPL to change the
hardware configuration, or to change the software definition for devices, control
units, and channel paths. This ability to dynamically reconfigure works in
conjunction with HCD and allows the new system configuration to be
implemented without interruption.
Enterprise Systems Connection (ESCON) Manager enhances user control and
manageability in an ESCON architecture environment when changing ESCON
Director (ESCD) configurations. The changes are entered at a host processor
rather than at the local ESCD consoles in the mainframe environment.
HCD and ECSON are highly dynamic tools that can effect configuration changes
easily and swiftly. However, there are no automation techniques currently in use
which update the inventory data base. Updates to the inventory data base require
29. manual intervention, therefore, it is important that these interfaces to HCD and
ESCON be constantly monitored and proper change control exercised to maintain
asset integrity.
1.3.5. 1.3.5. Network Environment
The complexity of the network environment requires an integrated set of facilities
to store and display network configuration data for all network resources. This
includes OSI, TCP/IP, SNA, Ethernet, and any other network resources. These
facilities are tailored for network operational use and contain information that is
pertinent to hardware and software inventories (e.g., Vital Product Information).
When dealing with large networks the immediate problems associated with the
collection of asset information is enormous and therefore, subject to significant
errors. If the configurations are too complex, they become impossible to manage
or understand. The typical network is composed of many nodes extending to
many different topologies. The technique commonly used to manage networks is
to break up the larger networks into smaller, manageable units. Once the
management of these clusters is underway, you can proceed to manage several
clusters from a higher node in the configuration hierarchy. This allows for
greater control and accuracy.
On the other hand, if the configurations are too granular, the system can become a
collection of small configurations with no relationships established between each
other. For example, when defining a large 3745 network, we first define the
lines, along with their drops, as separate configurations, then connect these lines
to the 3745 in another configuration. This logic can be applied to other layouts
as well, including the client/server arena.
Although the industry direction is to automate network asset control as much as
possible, managing the entire configuration does not necessarily have to be
automated from the start; especially within the enterprise. It is our primary
purpose to reduce the amount of manual work and the possible human errors
typically found in current network configuration and asset management processes.
Therefore, the technique presented here does not provide the Company with the
complete automation process for the entire enterprise configuration. Rather, we
recommend that you begin the initial steps for replacing much of the tedious work
of entering and updating configuration data manually.
1.3.6. 1.3.6. Data Requirements for Inventory Management
To ensure a consistent, centralized and integrated control, as described in the
previous section, a common data model must be built. This will ensure a
30. consistent reporting process to the inventory data base regardless of where the
data is stored.
In the event of incomplete record information, the inventory management area
must re-solicit, or advise the responsible asset area of the missing data elements.
This reentrant approach provides a disciplined strategy to build a reliable
inventory.
The structure illustrated in the next diagram allows the description of hierarchical
relationships among data centers, systems, components, service organizations, and
financial data. By entering descriptions of the hardware and software system
components, along with information about their status and support data, a data
base can be built which supports parent/child relationships.
The figure on the next page shows the interrelationship between component
records:
1.3.7. 1.3.7. Inventory Management Data Model
Inventory Management Data Model
Data Center
Record
System
Record
Hardware Service Software
Component Record Component
Features Features
Hardware Software
Financial Financial
Record Record
31. Figure 7: Inventory Management Data Model
The following items are required from asset sources to support an integrated
Configuration Management approach.
1. Data Center Record.
This record contains on-line information about the data processing centers, the
system name, location codes, emergency phone numbers, managers, and contact
names. The software and hardware components, and system records will refer to
this record.
2. System Record
This record contains information relative to each processing system within the
processing center. This record should contain the system names by LPAR,
location codes, operator names, support numbers. Software and hardware
components can refer to this record.
3. Service Record
This record contains the service organization’s data. Maintaining service
organization records is advantageous when a user is displaying a record of a
failing component. This record should contain the name, location, prime-shift
phone number, off-shift phone number, hardware and software representative’s
name, and contact phone numbers, and a description of the service organization.
Hardware and software components can refer to this record.
4. Financial Record
Helpful information in this record assists in warranty and service incidents.
Hardware financial records contain a user financial id, a financial type, and a
description. For software records the same information is required in addition to
a license type record entry.
5. Hardware Components
For hardware component records a consensus must be reached on the hardware
types to be managed. A hardware model record for each hardware type will be
created and all common hardware components will be entered using this template.
This record should contain the following information:
Component ID,
Product Number
Serial Number,
32. Generic device type,
Model,
Manufacturer,
Owner,
Install Date,
Location,
Maintenance Vendor,
Contract type,
Component status,
Component Criticality
Component description.
In some instances a hardware subcomponent record must be entered. A
subcomponent can be thought of as a feature that can be a stand-alone component
and has mobility in the inventory (for example, 3726, 3727, external hard disks).
This will allow subcomponents to be removed or moved from their hardware
component or attached to another component. This record should contain a
subcomponent status code and a description.
6. Software Components
For software component records a consensus must be reached as to what level of
installed software will be within the scope of the asset data base. For example, is
the workstation (PC-based) software to be managed? If so, are we to account for
all application software or just operating system software?
The answers to these questions are linked to what kind of information the user
support groups require to provide service to the client. In a centralized Help
Desk environment, all user application software, including maintenance levels,
are maintained. This provides up-to-date information to the Help Desk personnel
about the user environment and adds greatly to their productivity.
A software model record for each component contains an ID, maintenance level,
program type, status and a description. A typical software record should contain
the following information:
System (application runs on),
Product Number
Name,
Model,
Vendor,
Serial Number,
Renewal Date,
License Type,
Contract Type,
Maintenance Level,
33. Description.
7. Feature Components Record
This record identifies associated features and relates these features back to other
records.
8. Model Component Record
The industry uses this type record as a productivity tool to greatly enhance the
ability to build large data bases quickly with minimum data entry errors.
Model records themselves do not hold configuration data, but they make the entry
of data easier by allowing the creation of component records from models that
hold information common to a number of components (or subcomponents) of the
same type.
The model capability also provides the ability to build one or many relationships
between model features and hardware or software components. Features that are
common to many components can be contained in a single model feature record
that is referred to by many component records.
34. 1.3.8. 1.3.8. Collecting, Monitoring and Reporting Data
1. Monitoring and Reporting Data
Once the inventory data base has been built it will be used to satisfy the following
requirements
Determine bypass and recovery procedures when a failing component has been
identified.
Determine the level of a component, and also other components that are affected
when a problem occurs.
Establish relationships between a component and any problem or change record in
the data base.
Search for any components meeting specific characteristics, such as all terminals
in a network and the locations to which they are assigned.
Generate reports on specific configuration information, including but not limited
to the following:
- Hardware or software components with related features,
- Physical inventory by location,
- Hardware and software configuration maps, and
- Service reporting for maintenance contracts, warranty, and invoice
tracking.
2. Collecting Data
The Record Hierarchy in the following diagram indicates that component records
refer t data center, system, service, and financial records. These four records are
informational components. This means they must be created prior to creating the
component records (hardware, software). It saves time because these records
must be defined before they can be referenced in component records. This
allows you to establish connections as you create the records.
1.3.9. 1.3.9. Inventory Management Record Hierarchy
35. Inventory Management Record Hierarchy
Center, System, Service and Financial records must
be created before you can reference them in the
Center System Service Financial component records
Hardware / Software Hardware / Software
Component Model Component Direct
You can create
a component from
a Model record Hardware
Subcomponent
Model Record link relationship to
Component hardware component record.
Component
Hardware / Software Hardware / Software
Parent / Child Parent / Child
Relationship Relationship
Model Feature Feature Connection
Subcomponent Model etc. Hardware / Software Parent / Child Hardware / Software
Relationship
Figure 8: Inventory Management Record Hierarchy
36. 1.4. 1.4. Discipline Relationships
To ensure the integrity of the process, Inventory Management must interface with
multiple business and I/S system management functions. The interface to these
functions provides the foundation for strong Inventory Management practices.
1.4.1. 1.4.1. Business Function Interfaces
Some of the more common business functions that interface with Inventory
Management include:
Purchasing
This resource manages all information systems requirement identification through
the procurement process. Inventory Management provides input to Purchasing
in terms of system and network standard asset information.
Accounts Receivable / Payable Department
This function collects usage data and bills information System (I/S) expenses to
the appropriate users. It supports accounting, budget planning, tracking of
project costs, and other activities. Inventory Management provides financial
records as input to the Accounts Receivable / Payable process and vice versa.
This two-way interface occurs with the approval and submittal of billings for
payment.
I/S Management Committees
These groups investigate tools and services to provide policy information and
translate that data into recommendations for I/S productivity improvements and
services. Inventory Management will provide input to these groups in terms of
product standards and technology strategies.
Strategic Planning Committees
These groups deal with long-range planning and the integration of I/S objectives
with the business objectives of the enterprise. Inventory Management provides
an interface to Strategic Planning by providing insight into device migration
patterns, trends, and direction, and the Strategic Planning Committees provide
information back to the disciplines as well.
Security Department
37. This function manages the registration or enrollment of people and programs to
access controlled I/S resources. Inventory Management provides input about
device configurations and security interfaces to this functional area.
User Support Groups
Since these groups are responsible for their equipment acquisition, they must be
compliant with the inventory process. Tracking the acquisition of network and
computer equipment at the local level can be difficult without their full
participation. To ensure accountability of such purchases, provisions should be
made for a periodic physical inventory of such groups to ensure a level of
inventory integrity.
Client Support Services
These groups define the services that will be needed to support the I/S clients
within the enterprise. Within Services Management are two key areas:
1. 1. Help Desk - This area provides a single point of contact for clients to
request services and obtain resolutions for problems.
2. 2. Service Level Planning - this area identifies the agreement between the
I/S organization ad the user community that defines the level of service. The
service level agreement is also used to define policies for operations and
performance management.
38. 1.4.2. 1.4.2. System Management Interfaces
The Inventory Management discipline is dependent upon various disciplines and
functions within the enterprise in achieving its objectives. These disciplines and
functions and the assumptions related to their tasks are listed below:
Change Management
Coordinates the various tasks performed in configuration change and testing across the
data processing environment. Any changes to the I/S environment that affect Inventory
Management are input from this discipline.
Problem Management
Assists the I/S organization in locating, identifying, and resolving inventory problems.
The Problem Management discipline will provide input to Inventory Management as
problems arise that require changes to resolve conflicts.
Facilities Planning
Required to participate in the Problem or Change process as they pertain to the physical
environment and is accountable for any actions required to comply with the inventory
management process. It is essential that this group provide input to Inventory
Management and vice versa, to ensure changes in physical asset configurations are noted.
39. 1.5. 1.5. Inventory Management Tools
Inventory Management uses network definition information, Vital Product Data (VPD),
local configuration data bases and, in some cases, discovery applications in order to
arrive at inventory information.
The following list of Inventory Management tools was accumulated after conducting a
general survey of large corporations in the area. The participants represented large
corporations with an annual I/S budget of over $100M. The survey solicited information
about how they performed Problem, Change, and Inventory Management and what
techniques and tools were used to accomplish tasks in the two areas that follow.
Those products which are specifically mentioned were approved by the vast majority of
participants. We also list major Inventory Management functions that can be fulfilled by
any number of products, but do not specifically mention a product by name.
1.5.1. 1.5.1. Asset Management at the System to Server Level
The major components that provide the collection and reporting vehicles for Inventory
Management from the system level out to the network server level include:
VTAM and NetView
VTAM and some specialized features of NetView are responsible for maintaining
the necessary linkages to the physical asset, whether it is within the system
complex or out to the server level on the network.
Centralized Data Bases
All assets and their associated information are stored in a centralized data base.
Editing and browsing capability are available through an on-line menu driven,
front-end that provides restricted security access, if necessary. This security is
provided through any number of host-based security packages.
Network Configuration Application (NCA) / MVS
NCA/MVS is a useful tool for migrating existing stand-alone (PC-based)
inventory control data bases to host-based formats. It should be noted that in
some cases conversion utilities have been written to convert these stand-alone
environments into a data base file structure.
Enterprise Physical Connection Tool (EPCT)
40. EPCT is a useful product for building configuration data bases and producing
physical and logical diagrams. The figure below illustrates the usage of these
tools within the process.
Asset Management at the System to Server Level
Creates Configuration Drawings
NCS / MVS
Creates Configuration Drawings
EPCT
Data Base Repository for
all Assets (Mainframe through Centralized
Data Network) Asset Data Bases
VPD CMDS Collect Data NetView
Status Monitor - VTAMLST
VTAM
NETVIEW AUTOBRIDGE
* Alert / Problem Reporting
Remote Controller 3174 * Automated / Manual Bridge
* Serial Number
Remote to Info/Man
* Type / Model
Controller
P - Primary Connection
P S
S - Secondary Connection
Remote Terminal
* Serial Number
* Type / Model
Figure 9: Asset Management at the System to Server Level
1.5.2. 1.5.2. Industry Standards
Centralized Inventory Data Base Repository
The industry uses any number of system management products which integrate
the entry of Problem, Change, and Inventory Management into a common,
centralized data base repository. However, these integrated products must
interface to the tools listed below to facilitate the automation ad centralization of
an asset management data base repository.
VTAM Version 3.4 (Planning and Reference Guide - SC31-6124)
41. VTAM Version 3.4 is a telecommunication access method that works in
conjunction with MVS/ESA Version 4 to support non-disruptive addition of
channel-connected communications controllers and SNA cluster controllers.
NetView Ver. 2 Rel. 3 (User’s Customization Guide - SC34-4336)
Network Manager which will provide:
1. NetView Bridge Adapter (NetView Bridge Adapter Reference -
SC34-4336)
A component that provides a set of application-to-application
interfaces that will provide an effective means of connecting
NetView to external data bases.
2. Status Monitor Function
Collects status information about SNA resources such as hardware
data (from VTAMLST) and reports to a centralized data base.
3. NetView Autobridge Version 1 (User’s Guide - SC34-4318)
NetView Autobridge will allow the flow of configuration and
change data from NetView to a centralized Data Base Repository.
4. RODM - Resource Object Data Manager
The Resource Object Data Manager will provide services that
enable systems and network management. The facility is used by
NetView’s multi-vendor graphic enhancement and automation
platform. These services will be used to create configuration
drawings of the asset data base.
5. Network Configuration Application/MVS (NCA/MVS) Version 1
(User’s Guide - SC31-6149)
Network Configuration Application/MVS is a configuration
application for use on an MVS platform. It provides for collection
of information about equipment, circuits and software; has the
ability to create configuration representations for components in all
types of network topologies; and allows for creation of abstracts to
represent relationships of components. A utility function
transforms this data into the format required by the Resource
Object Data Manager Facility in NetView Version 2 Release 3 for
graphic views.
6. Enterprise Physical Connection Tool (EPCT) (User’s Guide -
SC23-0546)
This DB2-based asset collection and physical drawing product will
provide the capability to draw physical and logical topologies of
system and network complexes. EPCT is a locally developed
42. application written by the ISSC Corporation in C Language and
provides browsing an editing capability on-line. This product can
be ordered as an PRPQ through the IBM Corporation.
43. 1.5.3. 1.5.3. Downstream Network Server Configuration and Inventory
Management
The following figure illustrates a downstream view of Network Configuration and
Inventory Management.
Downstream Network Server and inventory Management
Data Base Repository Centralized Configuration INDUSTRY PENETRATION
Data Base
PVCS - INTERSOLV
VPD DMDS Collect Data NETVIEW LANFOCUS - IBM
Status Monitor - VTAMLST VTAM
Machine Serial Number WAN SERVER
Model / Type
Automation Stops
at the Server Level
AUTOMATED
MANUAL
This Layer Requires Additional Software To
Support Configuration Management
Figure 10: Downstream Network Server and Inventory Management
Asset management below the server level has not been widely implemented throughout
the industry today. WAN environments have their own unique challenges. Most host-
based products require an additional layer to bridge beyond the server level. The
products listed below are seeing some industry penetration and promise to be viable tools
in the coming months ahead.
PVCS Configuration Builder Series (Product of INTERSOLV Corporation)
The PVCS series covers all key functional areas for configuration management:
Version Management,
44. Build Management,
release Management, and
Report Generation.
These functional areas are available across all types of files including source
code, text, or documentation files, graphic or binary files. With PVCS Series
development teams can:
Recreate a system, or component of a system at any time and prevent inadvertent
errors and code changes with version management.
Rebuild an entire system when any component is changed without having to
remember complete relationships about elements of the system.
LANFocus Management / 2 (Product of the IBM Corporation)
This family of products provides System Management principles to LAN attached
workstations having OS/2 and DOS installed. The products provide a platform
which includes a programming interface for the creation of system management
applications. This includes applications which address the disciplines of problem
management, performance management, and configuration management.
45. 1.6. 1.6. Roles and Responsibilities
1.6.1. 1.6.1. Inventory Manager
Responsible for maintaining the Inventory in a current and accurate state. Role is
responsible for both mainframe and network resident devices and software
components. Interfaces with Systems Management disciplines and Financial
department.
1.6.2. 1.6.2. Inventory Clerks
Responsible for maintaining the Inventory Data Base Repository and for
guarantying the information contained within the Repository is accurate and in a
current state. Information is data entered, or entered via automated tools. If
automated tools are used, then clerks must be knowledgeable in program products
used as a tool.
46. 1.7. 1.7. Process Evaluation
1.7.1. 1.7.1. Present System Weaknesses
There is presently no Centralized Repository for asset information, because
Inventory Management is performed by many various groups (i.e., mainframe,
communications, data network, etc.). A consolidation of these data bases into a
centralized Inventory Repository should be planned.
When migrating to a centralized repository, automated tools and interfaces should
be developed, so that any acquisition, redeployment, or termination of assets will
have to accomplished through the automated system. This will reduce the effort
presently performed by personnel and guaranty the accuracy of the Inventory
repository.
1.7.2. 1.7.2. Recommendations for Improvement
Create a Centralized Repository of Inventory information.
Utilize Automated Tools and Front-end to the Inventory Repository.
Integrate the Inventory Repository with the everyday asset functions performed
by personnel, such as:
Asset Acquisition,
Asset Redeployment,
Asset Termination,
Lease and Contract Maintenance,
Volume Purchase Agreements, etc.
Utilize a “Criticality” indicator to relate assets and their criticality for disaster
recovery purposes. This will allow for reports that list all most critical resources
for a specific location, by type and costs.
Formulate a committee to investigate methods for improving Inventory
Management and implement the most rewarding suggestions from the committee.