effective inventory management system

8/18/2019 Effective Inventory Management System

1/18

T I P S & S T R A T E G I E S O N M A N A G I N G Y O U R

W A Y T O S U C C E S S

P R E S E N T E D B Y

Y V O N N E I . W I L S O N

Effective Inventory Management(EIM)


2/18

E I M W I L L E N A B L E Y O U R C O M P A N Y T OM E E T O R E X C E E D C U S T O M E R S ’E X P E C T A T I O N S O F P R O D U C T

A V A I L A B I L I T Y W I T H T H E A M O U N T O F

E A C H I T E M T H A T W I L L M A X I M I Z E T H EO R G A N I Z A T I O N ’ S N E T P R O F I T A B I L I T Y A N D T O M I N I M I Z E O U R C O S T S .

The Goal of EIM

by Yvonne I. Wilson - Materials Manager


3/18

K E Y I N P U T V A R I A B L E S

How Will Yo !chieve an EIM

"ystem#

Inven!"#M$n$%een

Inven!"#C!n"!'

E((e)*veInven!"#

M$n$%een



4/18

Inven!"# C!n"!' Inven!"# M$n$%een

$rotecting an% )!n"!''*n% the inventorystore% in yor warehose an% every other

stoc& location an% %oing everything 'ossible

to minimie the cost of filling or%ers

e'lenishing or stoc& inventory withthe right *antity+ of the right item+ at

the right time.

he Difference Between Inventory Control &

Inventory Management



5/18

+IT’S VERY EASY TO TURN CASH INTOINVENTORY , THE CHALLENGE IS TO

TURN INVENTORY INTO CASH.-

Effective Inventory Management

(EIM) Is Everyone,s es'onsibility



6/18

BENEFITS DANGERS

'timal inventory levels

"'ecifies sie an% the of goo%s stoc&e%

/ower han%ling an% hol%ing costs

"tan%ar%iation Increase% revene

Im'rove% cash flow

E0cessive inventory means i%le fn%s

E0tra han%ling an% hol%ing costs

Ina%e*ate inventory-loss of sales+cstomers loose confi%ence+ loss of life

/ittle consi%eration for mo%erate

inflation an% seasonality

1enefits 2 3angers With Inventory Mgt.



7/18

W$ D! Y!/ A0 C/0!e"0 E12e)3

$ro%cts available when nee%e% or 'romise%

The right *antity of the right 'ro%ct

$ro%cts %elivere% in a timely manner

$ro%cts to arrive at the %esignate% 'oint in goo%con%ition



8/18

What $revents Yo 4rom

!chieving !n EIM"#



9/18

5hallenges 2 Isses That Im'acts EIM"

!bsence of a 're-%etermine% or a''rove% stoc& list Gess wor&+ lea% to stoc& ots+ re*ests for new 'ro%cts w6ot

7stification

8n-reliable %ata - inventory amonts recor%e%

inaccrately eal nee% for the ty'e an% amont of s''lies often

n%erstate%6overstate%

"toc& not 'ro'erly rotate% 9 e0'ire%+ obsolete stoc&+

waste:o recor% &ee'ing system that will allow trac&ing an%

re'orting on $)/$' /0$%e of inventory Ma&es forecasting %ifficlt+ margin of error higher+ hge inventory+

high costs by Yvonne I. Wilson - Materials Manager


10/18

5hallenges 2 Isses That Im'acts EIM"

:o strctre% or scientific a''roach to forecastingthe real nee%s

Gt feelings+ gess wor&+ an% larger than necessary

amonts for the ;rainy %ay<Hoar%ing of inventory

:on-com'liance to or%ering sche%les

Im'act on hman an% other resorces+ rgent

re*ests



11/18

+ I F Y O U A L W A Y S D O W H A T Y O U ’ V E A L W A Y S

D O N E 4 Y O U ’ L L A L W A Y S G E T W H A T Y O U ’ V E A L W A Y S G O T . -

Where 3o Yo Go 4rom Here#



12/18

1est $ractices 2 1asic "te's To !chieving anEIM"

!ttit%eI. Inventory accracy an% EIM mst be 'romote%

throghot the organiation as everyone,s

res'onsibility II. Team involvement 9 %eci%e what to stoc&+ why %o

yo nee% to stoc& the item+ %etermine *antity+%evelo' a''rove% stoc& list

III. Eliminate any shortct to the 'rocesses



13/18

1est $ractice 2 1asic "te's To !chieving an EIM"

$rocess 3efinitionI. The 'rocess mst be clearly %efine% throghot the

organiation that affect inventory .

II. Get as many 'ersons involve%III. Ensre com'lete an% accrate n%erstan%ing of the

'rocess



14/18

1est $ractice 2 1asic "te's To !chieving an EIM"

P!'*)# $n5 2"!)e5/"e 5e(*n**!n

I. 8se the %efine% 'rocesses to now %ocment the'roce%res

II. $roce%res shol% not be limite% to 7st inventoryisses

III. 5om'lete 'roce%res to incl%e *ality+ 'hysicalas'ects+ an% safety

I=. 5lear an% com'rehensive %ocment



15/18

1est $ractice 2 1asic "te's 4or !chieving an EIM"

S$(( T"$*n*n%

I. $rovi%e training to staff on how to go abotcom'leting or%er forms+ how to calclate their

re*ire% stoc& levels an% also to go throgh the'roce%res with them.

.S$(( Te0*n%

I. This hel's in %etermining whether staff

n%erstan% things sch as the forecasting metho%san% also the 'roce%res



16/18

1est $ractice 2 1asic "te's 4or !chieving anEIM"

Monitoring of the 'rocesses for com'liance

I. 1egin to monitor com'liance to the 'olicy an% 'roce%resimme%iately. !ctions that %o not com'ly with the written$2$ mst be a%%resse% imme%iately with the em'loyee

involve%.Trac&ing for accracy

I. !ccracy trac&ing shol% be measre% as a 'ercentage oftotal transactions

. !ccontability

I. Having s'ent time to %ocment the $2$,s+ 'rovi%e trainingan% testing+ staff mst therefore be hel% accontable



17/18

1est $ractice 2 1asic "te's 4or !chieving an EIM"


5ont+ cont+ an% cont

I. 5ont inventory on a continos basis(cycle conting) to maintain high levels of

accracy.

.e-evalate

.eglarly reevalate+ continosim'rovement


18/18

T$n6 #!/7

;Effective InventoryManagement iseveryone,sres'onsibility<

The En%


effective inventory management system

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