Element for a Good Inventory System

The Elements of a Good Inventory System

Every company have inventory problem, every company will require the great system to manage their inventory so it will help you become more productive. But no matter how good you control, you are still fail if you don’t do some very basic things.

You may be able to improve on our recommendations or your enterprise may have to do things differently but if you follow our recommendations you’ll wind up with a pretty good system.

The Critical point of a great Inventory System

• Well Organized Location Names
• Location Labels that are easy to read, and unambiguous
• Unique, Short, and Unmistakable Item Numbers
• Units of Measure
• A Good Starting Count
• Software that tracks all inventory activity
• Good Policies
• Most Important: People who know and follow good policies

I will explain in my next post why these elements are so important.

Vivienne from www.mrp.com.my

Generate Great Item Code

Great Item Code will Make Your Life Much Easier!

Tips on Creating Item Number Schemes

• Unless you are forced to do so by something out of your control, never start an item number with a zero. Just trust us on this.
• Avoid using letters that can be confused with numbers.  The main culprits are O,I, and L. 
• DO NOT use a manufacturer's serial number or part number for your part number. These numbers are often too long and cryptic. Plus, if you switch suppliers, or the manufacturer changes their number it becomes meaningless to your organization. 
• Keep item numbers short - but not so short that they could be mistaken for other numbers (i.e. quantities). 4 - 8 characters will suffice for most organizations.
• Do not load item numbers with meaning - do not try to use the item number to describe your product. This will only make your numbers longer, and more complicated. Save this information for the item description.
• Consider using a few letters. Letters will help further distinguish your item numbers from other numbers, and they will greatly increase the number of possible item numbers you can have while keeping the overall item number length as short as possible.
• Using a few letters from the beginning of your item description at the beginning of your part numbers will make it much easier to look up items in pick lists. For example, if you were creating an item number for “Sauce, Chocolate” you might create the number “SAU101” , “Sauce, Caramel” “SAU102” etc...
• Avoid loading inventory item descriptions with more information than absolutely necessary. Information such as vendor names, manufacturer, country of origin, expiration dates, and so on belongs in the "item details", or" transaction details", areas where it can be used more effectively.
• Do not use characters that might confuse people or software. For example, using a comma in your item number might make it look like a quantity or price. Using a "/" can result in Excel formatting your part number as a date. Symbols such as "<", ">", and "*" can have unintended consequences when moving data between Clearly Inventory and your spreadsheet program. Try to keep your item numbers simple and alpha-numeric where possible.

Jobs/Work Order/Production Order or Manufacturing Order workflow

Jobs/Work Order/Production Order or Manufacturing Order are used to make "outputs", which are finished items and subassemblies, using "inputs", which are the labor, materials, and subcontract services used to make the outputs.

What are the  Jobs/Work Order/Production Order or Manufacturing Order workflow ?

Step 1 – New Job/Work Creation

• Generate job/Work either directly from sales order line for custom to make items or
  
  
• Generate job/Work  in response to net demand (means when your Stock level is below safety level as set and production needed to replenish them) 

Step 2 – Job/Work Release

• Release job/Work when your work center is ready or available
  
• Print job Order with Process and component detail. 

Step 3 – Job/Work Processing

• Request and Issue components to jobs, there are 2 option here :
  
  
  • Option A – You can Print an issue list to store for picking stock that require by the job, then after that enter the entries in the system or 
  • Option B – Make issue entries directly, print issue list then get storekeeper to pick stock
    
    
• Sometime your Job/Work might have outsourcing to 3rd party, in this case, base on the Job creation, user can generate Purchase Order for 3rd party subcontract services also if applicable
  
• After job feed back from shop floor, user enter job routing sequence completions and/or labor hours
  
• Receive POs for subcontract services
  
• Enter manufactured job receipts from Shopfloor  

Step 4 – Close Job 

Vivienne @ www.mrp.com.my

STOCK PICKING LIST

HOW TO IMPROVE STOCK PICKING PRODUCTIVITY

Every trading company have different type of warehouse, 40% of the labor cost are spend in the picking area. We will share information on this area and suggest where improvements could be made.

For a warehouse picking operation to be efficient, the office must prepare helpful picking lists. Getting an confirmed order from a customer and rushing it to the warehouse for picking for the handling process.


The office should go through a number of steps in processing paperwork as outlined below. We omit consideration of credit checking, bills of lading and labels in this discussion.


STEPS FOR THE OFFICE
The first step in improving the warehouse is to deduct each item from inventory. If an item is not deducted from inventory, the picker may spend time looking for it. Our experience indicates that an out-of-stock item may take up to 30% more time to look for than one that is in stock. Not only does the picker spend his own time searching, but he may ask other pickers or a supervisor for help or information.

The second step provided by the office should be to prepare a picking list with an exact location for each item. Third, each item on the picking list should be printed in the same sequence as it is located in the warehouse. If there is split picking for broken lots, full cases and full pallet items, the sequence should be broken out separately for each area.

The standard time to pick each order should show on each picking list. In this way the supervisor will be able to schedule the pickers, and the pickers will know the predetermined standards which they should meet or exceed.

When the picking list is prepared, all out-of-stock items should be deleted. This will keep the picker from reading extraneous material and will save time.

There is no one right way to pick. Every situation has to be examined for its peculiarities and special requirements. In a warehouse there are many variables which have an impact on picking. These effects may be positive or may slow up the operation.

ELEMENTS OF PICKING
A number of elements must be considered for effective picking. Generally the first element is to pick up the order. The second element is to read it. The third element is for the picker to go to the first item to be picked. This may either be riding on equipment or walking. The picker then picks that item. The next element might be to make a notation on the pick list. Then, he reads the next item, walks to that location, picks the item, makes a notation on the pick list and repeats this sequence for the balance of the items. After they have been picked, the items are brought back to a central point, laid down, and the order form might be signed or initialed by the picker.

In most manual picking operations, 80% to 85% of the time is spent either walking or riding. The balance of the time is spent studying the order, making notations and doing the actual picking. If we eliminate a good part of the walking or riding we can reduce overall picking time.

BANK RECONCILIATION

BANK RECONCILIATION MODULE
Manage all bank-related transactions through a single, automated process and ensure fast access and tight control for mission-critical financial information.