recent trends in inventory control
TRANSCRIPT
RECENT TRENDS
IN
INVENTORY CONTROL
INVENTORY CONTROL
Inventory is the raw materials, work-in-process
products and finished goods that are considered to be
the portion of a business's assets that are ready or will
be ready for sale.
Inventory control is the processes employed to
maximize a company's use of inventory.
RECENT TRENDS.
JIT System
MRP I
MRP II
ERP
JIT SYSTEM ( JUST IN TIME).
Companies employ to increase efficiency and decreasewaste by receiving goods only as they are needed inthe production process, thereby reducing inventorycost.
This method requires producers to forecast demandaccurately.
The company started this method in the 1970s, and
it took more than 15 years to perfect.
MRP I (MATERIAL REQUIREMENTS PLANNING)
Material requirements planning (MRP) and
manufacturing resource planning (MRPII) are
predecessors of enterprise resource planning (ERP), a
business information integration system.
MRP is concerned primarily with manufacturing
materials
ADVANTAGES & DISADVANTAGES
DISADVANTAGES
MRP only give accurate o/p if accurate i/p is provided toit.
MRP is costly, time consuming & difficult to implement.
ADVANTAGES
Helps to minimize inventory level.
Track material requirement.
Identifies shortage in inventory items.
On time delivery.
MRP II (MANUFACTURING RESOURCE PLANNING)
MRPII stands for manufacturing resource planning and
builds on MRP by adding shop floor production
planning and tracking tools.
MRPII is concerned with the coordination of the entire
manufacturing production, including materials, finance,
and human relations.
ADVANTAGES & DISADVANTAGES
ADVANTAGES
Better control of inventories.
Better quality and also control quality.
Improve design control.
Accurate inventory control.
Reduced working capital for inventories.
DISADVANATGES
Staff must be fully trained for achieving benefit fromMRP II.
Once implemented MRPII it will require accurateinformation.
ERP
ERP (ENTERPRISE RESOURCE PLANNING)
A third-generation system called ERP, or enterprise
resource planning, which integrates all departments of the
business, not just manufacturing and purchasing.
ERP Systems make it easier to track the workflow across
various departments.
ADVANTAGES & DISADVANTAGES
Advantages:
Optimization of business processes.
Accurate and timely access to reliable information.
Elimination of unnecessary operations and data.
Reduction of time and costs of litigation
Disadvantages:
The installation of the ERP system is costly.
ERP consultants are very expensive take
approximately 60% of the budget.
The systems can be difficult to use.