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a. Put someone in charge.
b. Establish a procedure to ensure that items entered into storage first are also the first
c. Clearly mark items with their serial number, part number, production date, quantity,
and date of entry into storage.
d. Make clear the order in which items have arrived. You can, for example, classify
goods by putting them in boxes according to the order received.
e. Clearly mark their storage location and position.
f. Establish a separate entrance and exit for raw materials.
g. Place heavy goods, such as steel plates, in rows rather than stacking them.
h. When storing important components, number each component sequentially and use
them in order. Discussion
The following questions ask you to think about how the ideas in the text could be applied in
your company. Some of the ideas may not be relevant to you. Concentrate on those that are
relevant. Keep notes of your conclusions – you will need them to prepare your action plan
afterwards. Where appropriate ask yourself the RADAR questions.
Note: Always include in your discussion any figures referred to in the text, if you feel these
are relevant to your company.
a. Parag. 2 presents criteria for storing items. How would you apply these criteria in
your workplace. Be as specific as possible.
b. Parag. 3:Is your storage system easily accessible to people who are unfamiliar with
it? Where do you think there is room for improvement?
c. Parag 3 presents a number of rules and procedures for storing goods. Apply the
RADAR questions to these.
d. Do you already have a first-in, first-out storage system? If not, do you have any
problems with items being stored until they are too old?
e. Parag. 5 gives several suggestions for setting up an FIFO system. How would you
apply these in your workplace? Action plan
Go over the notes of your discussion. Then draw up a detailed and concrete action plan for
improving the storage system in your company. Alternatively you may choose to prepare one
action plan when you have discussed several texts. You might like to follow the 6-Point Structure. A Roadmap to Quality 17 Unit 5 - Disposal and Storage UNIDO unit 5.qxd 3/10/05 1:04 PM Page 18 5.4 Set up a good inventory system
1. A good inventory system is essential if a workplace is to run smoothly and efficiently. The
inventory is the quantity of products, parts, WIP indirect materials, packing materials etc.
that are kept in stock. Maintaining the right level of inventory means that whatever is
needed for the production process is there when it is needed – but not too much, since
this would be uneconomical.
(Text 13.5 in Unit 13 Production Control provides more specific guidelines on
maintaining a product inventory, components and raw materials inventories, and a WIP
2. To set up a good inventory system take the following steps:
a. Decide on appropriate inventory levels, and set up procedures to maintain these
b. Carry out regular reviews that these inventory levels continue to be appropriate.
c. Carry out periodic inventories (i.e. checks of what is in the inventory – note this
slightly different meaning of the word inventory) and keep records.
d. Set up an efficient storage system for the inventory.
e. Ensure that inventory levels can be seen at a glance.
f. Establish a system for moving items into and out of the inventory. Decide on appropriate inventory levels and set up procedures to
3. To decide on and maintain appropriate inventory levels:
a. Keep a note of when items will be required by departments, customers, internal
process points, etc.
b. Be aware of changes in use: daily, seasonal, or by product.
c. When you place an order, check the delivery date.
d. Keep a note of when incoming items are expected.
e. Check the possibility of receiving alternative items if the required items are not
f. Establish standards specifying the right levels.
g. Decide on a method to order refills or replacements, either the regular ordering
method or the fixed-point ordering method.
h. Appoint a person to supervise the inventory.
(Fixed-point ordering method: if the inventory falls to a pre-determined level, then a
purchase order for a fixed amount will be placed. Regular ordering method: goods are
ordered regularly at set times.) Unit 5 - Disposal and Storage 18 A Roadmap to Quality 3/10/05 1:05 PM Page 19 Figure 5.4a Regular and fixed point ordering methods
Fixed-point order method Lead
Time Order Date Order Date
Interval Order Date Amount of Inventory Regular order method
Amount of Inventory UNIDO unit 5.qxd C
A Order D (First Order) Quantity(Q) (Second Order)
Interval Source: “Introduction to Inventory Control”, Yukio Mizuno, The Union of Japanese Scientists and Engineers
(JUSE) Press, 1983, pp. 7, 49. Carry out regular reviews that these inventory levels are still
4. Production conditions and customer requirements are always changing, and the
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This note was uploaded on 10/07/2013 for the course MKT marketing taught by Professor Anamika during the Spring '12 term at Punjab Engineering College.
- Spring '12