Inventory Management in Manufacturing

* The Course has subtitles in English, Afrikaan, Italian, Simplified Chinese, Spanish and JapaneseIn a Manufacturing Industry, you will be using multiple types of materials to make and sell your Products. Each type of material according to it's use, will have to be planned for fulfillment, storage, usage in Manufacturing and selling the main products. Various types of material such as Raw material, Finished material, sub-assembly or semi-finished material and MRO etc are to be handled in different ways in terms of planning, storing, valuations and managing their inventories.

Hence planning of materials for making and selling product and planning of the product (finished items) themselves needed multiple levels of strategy to ensure you keep the customer satisfied and at the same time, keep your financial parameters in control. You hence needed to understand the functions of multiple types of inventories to determine the kind of controls you want to apply. Understanding on various types of materials helps in that aspect.

In addition, the special classifications such as ABC Analysis can consolidate the kind of material that need maximum attention and those that can have relatively loose controls. In other words ABC classification helps you determine the level of Inventory Policies and controls to apply on specific group of ItemsThe planning of the materials was quite preliminary before 1960's. Those days, the planning was just reactive on the basis of inventory stock levels.

the review of stocks was also done only on basis of stock level of each item without any consideration on dependencies among the items handled in your organization. For example, you plan laminations, Wood and bolts at individual levels without acknowledging that all of them together may be required to make a piece of furniture such as Table, Chair etc. The assumption made in these reactive inventory planning methods were not at all close to real business scenarios.