According to the APICS Dictionary backflushing backlashing is a method of

According to the apics dictionary backflushing

This preview shows page 37 - 39 out of 39 pages.

According to the APICS Dictionary, backflushingbacklashingis “a method of inventory bookkeeping where the book ( computer ) inventory of components is automatically reduced by the computer after completion of activity on the component’s upper-level parent item based on what should have been used as specified on the bill of material (BOM ) and allocation records . This approach has the disadvantage of a built-in differential between the book record and what isphysically in stock.”Any BOM errors will generate erroneous inventory transactions, and few company decision makers put the necessary controls in place to audit the BOMs, identify problems, and correct inventory balances. Items missing from the BOMs are equally problematic, as unreported usage inevitably leads to shortages.Fixing the system Inventory reporting and accuracy don’t have to be impediments. It’s really not that hard to get a handle on inventory and maintain good records; all it takes is an appreciation of inventory’simportance and the willingness to assign a resource to the problem. Topic 14 - 36
Image of page 37
Cycle counting is the best tool for identifying transactional issues and correcting the processes in order to avoid future errors. Cycle counting also fixes records, but that is not its primary purpose – rectifying the system is the real reason to Cycle count. The traditional benchmark for inventory accuracy for success with material requirements planning is 98 percent. That means that, for every 100 items counted, 98 will be correct; it does not mean that the total error (units or value) will be less that 2 percent. This is a subtle difference,but an important one. That goal of 98 percent accuracy also is quite appropriate for ERPM SCM, APS, lean manufacturing, and any other tools or techniques you might be using. It is a reasonable, achievable goal and will support the efficient and effective operation of your business. Of course, there are exceptions and interpretations that must be made based on the materials,products, measurements, and velocity that make these general rules subject to adaptation for yourspecific situation. The important thing is to make sure reports on inventory movement areas accurate as humanly possible without causing an undue burden on the people handing and using the inventory. It’s essential to know what you have; but it, 5 also important to bow exactly where it is.Topic 14 - 37
Image of page 38
Review Questions for Topic 14:< INVENTORY MANAGEMENT: INDEPENDENT DEMAND ITEMS >
Image of page 39

You've reached the end of your free preview.

Want to read all 39 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes