M02 BuyIt Sp2010 Student

M02 BuyIt Sp2010 Student - 01 Module 02 BUY IT: Inventory,...

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Module 02 BUY IT: Inventory, Purchasing, EOQ, Forecasting 01
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Key Terms Defined 02 Independent Demand Item – Items for which demand is influenced by market conditions. Demand is not related to demand for other items in stock or produced. Dependent Demand Item – Items that are required as components or inputs to other products or services. Lead Time - Time elapsed between customer placing order and order being received by customer Lot Size – Typically refers to the order size SKU – Stock Keeping Unit. Unique identifying number used to track each unique product customers can purchase.
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Module 02 Part 1: Inventory 03
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Inventory: Basics 04 Inventory is your insurance against risk at every stage of the supply chain. Inventory is “IT”- Remember Buy IT, Make IT, Move IT, Sell IT, Service IT ? Relate inventory types to supply chain stages. Stock of any ITEM or RESOURCE used in an organization. Not just what you sell. Also includes what you need to run the business on a day-to-day business. Types of Inventory: Raw Materials/Components, Work-in-Process, Finished Goods Spare and/or replacement parts Capital Equipment & MRO (Maintenance, repair &
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Inventory Considerations 05 Storage - Space, Heat/Cool Environment, Energy Requirements, Labor, Handling, Buy/Lease, Cost Transport - Vehicle, Cool/Heat, Fuel, Labor, Packaging, Cost Shrinkage - Pilferage, Security, Lost Items, Damaged, Obsolescence Other Inventory Needs - What else do we hold in inventory? Do we have enough room for everything we typically carry? Money - Cash, Financing Terms, Taxes, Insurance Legal Considerations - Licenses, Certifications, Other Laws
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Supply Chain Risk 06 UNDERSTANDING YOUR RISK LEVEL Who is at risk? Whose risk is it? How can everybody protect themselves? Why is risk assessment important? TYPES of RISK Loss, Damage, Theft, Breakdowns Human Resources Fluctuating Demand (Electricity) Market Changes – Innovation, Growth Other – Environmental, Political, Criminal… RELATIONSHIP to WASTE and SUPPLIER RELATIONSHIPS
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Why Keep Inventory? 07 1. INSURANCE – Manage Risk/Uncertainty Common risks - Breakdowns, accidents, weather, defects, strikes, illness, forecasting errors, theft BUY IT – Suppliers have the same risks. Protect yourself against their problems. MAKE IT – Labor, machine breakdowns, high demand… MOVE IT – Theft, late shipments, logistics problems associated with distance… SELL IT – Theft, high demand, damaged items … SERVICE IT – Defects, repair, warranties, maintenance
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Why Keep Inventory? 08 1. CUSTOMER EXPACTATIONS - Support strategic plan In some industries, companies make it their business to have large amounts of inventory on hand for your convenience – Wal- Mart, Home Depot, Circle K.
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This note was uploaded on 02/09/2010 for the course SCM scm 300 taught by Professor Davilas during the Spring '10 term at ASU.

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M02 BuyIt Sp2010 Student - 01 Module 02 BUY IT: Inventory,...

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