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

Your 5 Year Fantasy

Your 5 Year Fantasy

It's 2013.  You are ____ years old.  In five years it will be 2018 and you will be ____ years old. What do you want to do or be ?

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.

Early Communication

Early Communication

Misunderstandings between people cause a lot of problems.  People wait to say how they feel; it grates on them and magnifies, and finally it's a big deal. Ask other people how they see it and how they feel, and tell them how you see it and how you feel early on. When people talk without high emotion, little problems melt away and don't become big ones. At the first sign of confusion, ask questions and talk, do you ?  Vivienne @ www.mrp.com.my

Quit

Quit

Quitting can be good - even essential for success. If you're -
-going the wrong way
-pursuing the wrong things
-hurting yourself (in the long term)
-have bad habits
-pursuing a high price/low reward goal
-going to quit something to make room or time for something better

do you have the above problem on you? Is it time to quit something? i am not qutting, ARE YOU ? 
Vivienne @ www.mrp.com.my

Are you in the right business?

Are you in the right business?

Just Askin'.... Why? Why not? What is the right one? Why? Why not?

I am in the right business, what about you ?

Cheers

Vivienne @ www.mrp.com.my

How to Become an Efficient Manufacturer

What is an efficient manufacturer?

An efficient manufacturer is a company that does the following:

1.Completes customer job quickly and on time

2.Keeps inventory as minimum as possible

3.Maintains high product quality

4.Efficient manufacturers have high operating margins, great return on investment, and are making more profit compare to inefficient manufacturers.

We found that most manufacturers company are inefficient, the ineffecient symtoms can be the following :

1. always shortages of material and finish product

2. high expediting costs

3. customer order always Late for deliveries

4. customer return is high due to Poor quality

5. always Over stocking

6. Anemic profits

how do your company become more effecient  ? we will share our step by step methodology.
do enjoy and come back.
Vivienne @ www.mrp.com.my

Positive attitude

You've got to overcome adversity, fight those that work against you, deal with the biggest problems in the organization, deal with regulation and red tape, take ultimate responsibility for it all - and still have enough positive attitude and confidence left over to rally the team and make people feel like they are at the right place.

We need more leaders with guts. and if you are one - I understand and I salute you!


Vivienne @ www.mrp.com.my

Make an adjustment and try again.

There's no failure, only feedback

As long as you haven't given up, there is no failure; only feedback. The universe is teaching you - "When you do this, I am showing you what happens.  If it's not what you want, make an adjustment and try again". Make an adjustment and try again. Make an adjustment and try again. Vivienne@www.mrp.com.my

What is Job Travelers

Job Travelers

The job traveler giving information to your shop floor with the manufacturing process require to perform the job, including job details, customer, order information, outputs, process, tasks, components, and images. It is printed at time of job release and "travels" with the job as it progresses through the shop floor.  

Vivienne @ www.mrp.com.my

What is minimum stock level ?

The minimum stock level is that level of stock below which stock should not be allowed to fall. In case of any item falling below this level, Production or Purchase needed to replenish the stock. 


Some system have the ability to assist user to generate a list of stock needed for their production planning or planned purchase order to take place from supplier. 


Do you have any system in place to assist you or you are still using excel for the control ? 


vivienne @ www.mrp.com.my

Your itinerary please...

Your itinerary please...

There's 9 1/2 months left to 2012.  You're taking your organization on a trip. Where are you going?  Does everyone know? vivienne @ www.mrp.com.my

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

Small Accounting software VS Manufacturing Software

Wondering why there are many companies using only small accounting software but not integrated manufacturing software ? 

Because they have not aware of the availability of manufacturing software in the market and what is the software can do. many small companies are fully aware of the limitations of general accounting software and excel spreadsheets, but are busy and never find the time to upgrade to a manufacturing software package. they are also fear and are worry of manufacturing software might be too costly to implement, too difficult to implement, and too hard to use.  Are you one of them ? 

Vivienne @ www.mrp.com.my

How are BOMs costed?

How are BOMs costed?

The Cost Rollup calculates a total estimated cost for the BOM parent. Each purchased component has an estimated cost from inventory. Each work center is given hourly rates for setup, labor, and manufacturing overhead which get applied to each routing sequence. Estimated costs for subcontract services are maintained in routing sequences. The Cost Rollup calculates all these costs up through all the subassemblies in the product structure to arrive at the total estimated cost for the BOM parent.


If the BOM includes secondary outputs, a portion of the parent item’s cost is allocated to each output on a percentage basis.

What is the BOM estimated cost used for?

BOM estimated costs are helpful for product pricing decisions. You also benefit by continuous monitoring of work center hourly rates, which keeps you in touch with your item labor and overhead costs.

Is the BOM estimated cost compared to actual job cost?

Not directly. When the job gets created from the parent item’s BOM, the program calculates an estimated job cost. If you modify the job’s BOM specifications, the estimated job cost gets changed accordingly. It is the estimated job cost that gets compared to actual job cost. 


Vivienne @ www.mrp.com.my

Job with BOM

So jobs also have BOMs?

Yes, each job has its own BOM. The parent item’s BOM is copied to the job and its component usage quantities are multiplied by the job quantity. Once the job’s BOM has been created, it can be modified for any special requirements.

Vivienne @ www.mrp.com.my

What are the BOM "components?"

What are the BOM "components?"

The BOM "components" are the subassemblies, purchased parts, and raw materials that comprise the physical product.

How are BOMs used?

BOMs are used by the MRP screen to generate Custom to make jobs for manufactured items in response to customer orders and your desired stocking levels. MRP uses each item’s BOM specifications to create the job’s routing and BOM. 


Vivienne @ www,mrp.com.my

What is the BOM Routing ?

What is the BOM "routing?"

The BOM "routing" can be thought of as a "bill of labor." In the routing you define the setup, labor, and subcontract service sequences that comprise the manufacturing process.


Vivienne @ www.mrp.com.my

What are BOM revisions ?

What are BOM "revisions?"

Each BOM is assigned to a current "revision", which represents the latest engineering specifications for the BOM parent. Past revisions are stored to provide a history of engineering changes.

Vivienne @ www.mrp.com.my

What is an BOM output

What is an BOM "output?"

An BOM "output" refers to a finished item produced from a BOM. Most BOMs are defined with one output, which is the BOM "parent" item, but you can also define "secondary" outputs for by-products and co-products. Secondary outputs are commonly used by batch process manufacturers, remanufacturers, and disassemblers.


Vivienne @ www.mrp.com.my