1 overview of oracle inventory

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R12 Overview of Oracle Inventory


Objectives

After completing this module, you should be able to do the following:

• Describe the overall inventory process from receipt to issue

• Discuss the key integration points between Oracle Inventory and other Oracle Applications


Overview

Finished goods

What is inventory?

Raw materials

Spare parts

Consigned inventory

Services


Inventory Capabilities

AS18947

Define part numbers Define organizationstructures

AS18947 = 1000 on-hand

Track on-hand inventory

Plan material replenishment


Inventory Capabilities (Cont)

Issue material Forecast demand

Maintain inventory accuracy

Reserve material


Receipt to Issue Life Cycle

Receive inventory Issue inventory

Transfer inventory


Receiving Inventory

Purchasing Work in process

Inventory

Receiving


Receiving Inventory

Types of Inventory Receipts

• Receipt and Deliver (Direct)

• Receipt then Deliver (Standard)

• Inspection– Receipt– Inspect– Deliver


Transferring Inventory

Transfer

Inventory Shipping

Work in Process Order Management


Issuing Inventory

InventoryPurchasing

Work in Process Order Management

Issuing


Oracle Inventory Application Integration

• Oracle Project Manufacturing

• Oracle Flow Manufacturing• Oracle Advanced Supply

Chain Planning / Global Order Promising

• Oracle Warehouse Management

Oracle Purchasing

Oracle Order Management

Oracle Engineering

Oracle Work in Process

Oracle Cost Management

Oracle Field Service

Oracle Bills of Material

Oracle Inventory Integrates with the following applications:


Integration of Oracle Inventory to Financial Applications

Oracle Assets

Oracle Receivables

OraclePayables

OracleGeneral Ledger

Oracle Inventory

ExternalSystems

Oracle CostManagement


R12 Defining Inventory Organizations


Inventory Organizations

Company

Distribution Center

Warehouse


Inventory Organization Structure

Organization

Subinventories

Locators


Multi-Organization Structure

What is multi-organization structure?

• Applications and database enhancement

• Enables you to consolidate your operations under one installation of Oracle Applications on a single global instance

• Enables you to keep transaction data secure by line of business


Setting Up Locations

Physical location

Employees Organizations


Defining Organizations

Inventory

Organization A

Ledger

Locator Locator Locator Locator Locator

Subinventory Subinventory Subinventory Subinventory

Inventory

Organization B

Operating unit


Inventory Parameters

The Inventory Parameters tab enables you to:

• Set up organization information

• Enable specific products and features

Oracle ProcessExecution

Oracle EnterpriseAsset Management

Oracle Warehouse Management


Costing Parameters

Which Costing method is the organization going to use?– Standard

— Average costing is used primarily for distribution and other industries where the product cost fluctuates rapidly, No shared costs; average cost is maintained separately in each organization

– Average— Use standard costing for performance measurement and

cost control. Can share costs across organizations when not using Work in Process

– FIFO ( First in First Out)— Costing method where items that were received earliest

are transacted first

– LIFO ( Last in First Out)— Costing method where items that were received most

recently are transacted first


Revision, Lot, Serial, and License Plate Number (LPN) Parameters

Item AS5222Serial #5847329

Serial parameters LPN parameters

LPN101

Revision parameters

Revision A

Lot parameters

Lot 403B


ATP, Pick, Item-Sourcing Parameters

The ATP, Pick, Item-Sourcing Parameters tab enables you to:

• Set the available to promise (ATP) default rule for the organization

• Set the picking defaults for the organization

• Set the item-sourcing defaults for the organization


Interorganization Parameters

The Inter-Org Information tab enables you to determine the parameters the organization uses when it transfers material between organizations.

M1 Seattlemanufacturing

M2 Bostonmanufacturing


Other Account Parameters

You use the Other account parameters tab enables you to set up receiving account information, profit and loss account information, and other additional accounts.


Warehouse Management Parameters

If you have Oracle Warehouse Management installed you can enter organization parameters that apply only to Oracle Warehouse Management.



What is a Subinventory?

Finished goods

Raw materials

Defective items


Defining Subinventories

Subinventory

• Physical or logical separation of material

• You must define at least one subinventory for each organization


Locator Control

Row

Rack

Bin


Dynamic and Static Locators

Dynamic Locators• Generate during a

transaction as needed

Static Locators• Predetermined


Subinventory-Locator Relationship

Subinventory: BULK Subinventory: FROZENWith locator control Without locator control


Interorganization Shipping Networks

Shipping organization

Destination organization

Direct organization

transfer


Intransit shipment


Additional Set Up Steps

Employees Planners

Freight carriers


Additional Organizational Setups

Organization access Material shortages


Copying Inventory Organizations

M1 Seattle manufacturing

M2 Boston manufacturing

Copy organization


Implementation Considerations

Products and features

• Do you need to set up additional products or features?

Oracle ProcessExecution

Oracle EnterpriseAsset Management



Implementation Considerations (Cont)

Subinventories

• Is it necessary to differentiate between receiving and storage subinventories in your warehouse? Do you need to link your receipts to a receiving location? Do you need to track material without it appearing in on-hand quantity?



Locator control

• Do you need to implement locator control?

• Do you need to need to implement locator control for the organization, for individual subinventories, or at the item level?

• Should locator control be predefined, just-in-time, or both?



Organization access

• Should all responsibilities have access to the organization?

• Which responsibilities should have access to the organization?



Shipping networks

• Do you need to ship material between organizations?

• Do you need to track inventory between transfers?

• How do you want to ship material between organizations?

• Do you ship material to Japan, Korea, or Taiwan?


Summary

You should now be able to:

• Understand the structure of an inventory organization

• Understand the multi-organization structure in Oracle Applications

• Understand organization implementation considerations


R12 Units of Measure


Units of Measure

A unit of measure is a value that specifies the quantity of an item.

Each Liter


Uses of Units of Measure

Planning

Bills of Materials

Work in Process


Unit of Measure Class

Each Box of 4 Box of 8

Volume Weight Temperature


Unit of Measure Conversions

Base UOM

Yes

No

No

UOM

lbs

kg

g

1 kg = 2.208 X lbs

1 g = 0.002208 X lbs

UOM Class = Weight UOM Conversion

UOM Interclass Conversion

Conversion

2Weightlbs

Item

Keyboard

DestinationBase UOM

DestinationUOM Class

SourceBase UOM

SourceUOM Class

QuantityEach

2 Each = 1 lb


R12 Defining and Maintaining Items Fundamentals


Objective


• Understand how to define, setup and maintain items,

• Understand item templates

• Understand item control levels

• Understand item categories and catalogs


What is an Item?

Component

Assembly

Service

Container


Defining Items

Use the Master Item window to define and update items and item attributes


Defining Items

Enter attribute values

Enable in child organizations

Update organization level attributes

Define item costs

Copy templates or items

1


Item Master Organization

Manufacturing (Dallas)

Assembly (Chicago)

Distribution (Seattle)

Item master org

Define items in the

Item Master

Transact items in the inventory organizations


Item Master

Master organizationV1

Child organizationM1

Child organizationM2

Child organizationD1


Item Attributes

Item

Serviceable Weight

Buy MakePlan

Attributes


Item Attribute Groups

• Main• Inventory• Bills of Material• Costing• Asset Management• Costing• Purchasing• Receiving• Physical

• General Planning• MPS / MRP• Lead Times• Work In Process• Order Management• Invoicing• Process Manufacturing• Service• Web Option


Item Status

When you define an item, you use the Item Status attribute to assign an item status.

Item number = AS1359

Item status = prototype

Item number = AS1359

Item status = active


Unit of Measure Attributes

Each Liter


Status Attributes and Functionality

Status Attribute Functional Area Functionality

Stockable Inventory Enables you to store the item in an asset subinventory.

Transactable Inventory, Order Management, Purchasing, Work in Process

Enables you to transact the item in Oracle Inventory, Oracle Order Management, Oracle Purchasing and Oracle Work in Process.

Purchasable Purchasing Enables you to place the item on a purchase order.

Build in WIP Work in Process Enables you to build the item on a discrete job, a repetitive schedule, or both.




Customer Orders Enabled Order Management Enables you to place the item on a sales order.

Internal Orders Enabled Inventory, Order Management, Purchasing

Enables you to create an internal sales order for the item.

BOM Allowed Bills of Material Enables you to create a bill of material for the item.

Invoice Enabled Receivables Enables you to create an invoice for the item.

Recipe Enabled Process Manufacturing Enables you to create a recipe or formula for this item in process manufacturing.




Process Execution Enabled

Process Manufacturing Enables you to use the item in a production batch as an ingredient, product, or by-product.


Item Templates

An item template can be assigned when you create or update an inventory item. The template contains values for any number of item attributes.


Creating Item Templates

• If you regularly define items that share the same values for a number of attributes, you can define item templates that predefine these attributes.

• An item template contains values for any number of item attributes. Oracle Inventory has several predefined templates that you can use to define and update items. You may also define your own item attributes.


Enabling Attributes in a Template

• You can enable attributes and assign them values in each template that you create.

• When you apply a template to an item, Oracle Inventory updates only the attributes that are enabled for the template.

• You can define templates with relatively few attributes enabled because you can apply more than one template to define one item.


Organization Assignment and Organization Items

Master organization

Child organization

Child organization

AS18947

Enabled

Not Enabled


Control Levels

Master organization

Child organization

Child organization


Build in Wip = yes



Build in Wip = no


Item # AS5488

B&W display device

Revision A

Item # AS5488

Color display device

Revision B

Revision Control


Item Relationships

Up-sell

Substitute


Categories and Category Sets

Computer category

Peripherals category

Hardware category set


Assigning Items to Categories

Computer category

Hardware category set

ItemAS18947


Deletion Constraints

• If you want to enforce specific business rules and add custom checks before Oracle Inventory allows deletion of an item, you must define item deletion constraints to supplement the standard predefined item deletion conditions.

• The major use of item deletion is to correct data entry errors. For example, if you defined an item with the wrong primary unit of measure, you can use the delete function to remove the item from your database. If you decide to purge the item immediately after incorrectly defining it and before using it anywhere in the system, you will be able to delete it.


Deletion Constraints (Cont)

• After an item is used, for example in an assembly, Oracle Inventory automatically creates references to it.

• Oracle Inventory checks all possible references to an item and does not allow it to be deleted until every reference is removed.


Lot and Serial Control


Lot Control Overview

Item AS3339Lot# C1498

Lot controlled item

Item AS1129

Item without lot control


Child Lots

Parent lot Child lot


Setting up Lot Control (Organization Parameters)

Organization parameters

• Lot control uniqueness

• Lot generation

• Child lot generation control– Format validation– Copy lot attributes

• Auto create lot UOM conversion

• Allow different lot status


Lot Number Uniqueness

Item AS100Lot LN100

Item AS101Lot LN100

Not Set to Across Items Set to Across Items

Within Organization

Across Organizations

Item AS100Lot LN100

Item AS101Lot LN100

Within Organization

Across Organizations

Item AS100Lot LN200

Item AS100Lot LN400

Item AS101Lot LN300

Item AS101Lot LN600


Setting up Lot Control (Item Attributes)

• Lot control (Full Control)– Starting prefix and number

– Maturity and hold days

• Lot Expiration (Shelf Life)– Shelf life days

– Retest interval

– Expiration action interval and action

• Child lot enabled– Format validation

– Copy lot attributes

• Grade control– Grade


Expired Lots

Item: AS2005

Lot: C3100

Lot expiration action: Dispose

Item: AS2005

Lot: C3102

Lot expiration action: Retest

X

X


Disabled Lots

XItem CS100

Lot S246

Disabled

Item CS100Lot S247

Active


Lot Number Purging

• You can purge all lot transaction information from your current organization. The transactions must be in closed accounting periods.

• Purging lot transactions eliminates information used in lot reports and inquiries.


Cycle Counts Under Lot Control

• The cycle count listing includes the lot numbers of the items to be cycle counted.

• You must assign lot numbers to all items under lot control for which you enter counts.

• If there is a difference between the cycle count quantity and the system on-hand quantity, Oracle Inventory adjusts the item quantity in that lot.


Physical Inventory Under Lot Control

• Oracle Inventory includes the lot numbers of the items to count in your physical inventory when generating tags.

• You must assign lot numbers to all items under lot control for which you enter counts in the Physical Inventory Tag Counts window.

• If there is a difference between the count quantity and the system on-hand quantity, Oracle Inventory adjusts the item quantity in that lot.


Serial Number Overview



Serial Controlled Items


Generating Serial Numbers


Predefined


At inventory receipt


Item: AS100Serial: SN100


Serial Uniqueness

Item AS100Serial SN100

Item AS101Serial SN100



Within items Within an organization Across organizations


Lot Genealogy

Item: OJ100

Lot: Juice100

Item: CM200

Lot: SR100Item: CM300

Lot: WR100

Item: CM600

Lot: OR500


Serial Genealogy

Item:AS100Serial: SN100

Item: CM100Serial: SN200

Item: CM200Serial: SN300

Item:CM300Serial: SN400

Item:CM400Serial: SN500


R12 Transaction Setup


Transaction Source Types

The type of entity against which Oracle Inventory charges a transaction.

Transaction source type

Purchase order

Job


Transaction Action

A generic type of material movement or cost update.

Transaction Action

Assembly Return


Transaction Reasons

• A standard means of classifying or explaining the reason for a transaction

• User defined

• Used in all transaction forms

• Use these with any type of material transaction

• Reports available by Transaction Reason


Transaction Types

Transaction Source Type

Transaction Action

+ = Transaction Type


Predefined Transaction Types

Source Type Action Type

Purchase Order Receipt into Stores PO Receipt

Cycle Count Cycle Count Adjmt Cycle Count Adjmt

RMA Issue from Stores Reject Cust Return

Job or Schedule Assy Completion WIP Assy Compl

Internal Order Issue from Stores Internal Order Issue

Inventory Receipt into Stores Miscellaneous Receipt


Transaction Managers

• Transaction managers control the number of transaction workers, processing intervals, and number of transactions processed by each worker during each interval.

• Transaction managers run at the periodic intervals you specify until you disable them with the concurrent manager.


Running Transaction Managers

Cost Transaction Manager

Move Transaction Manager Material Transaction Manager

Lot Move Transaction Manager


Creating Picking Rules

Picking rule

Sort criteria (Subinventory)

Applies to(Sales order)


Account Aliases

An account alias is an easily recognized Name or label that represents a general ledger (GL) account number.


Accounting Periods

Process inventory transactions

Accounting period

Open period

Close period

Automatic general ledger transfer


Material Shortage Alerts and Notifications

<Supply Demand

Shortage Alert


Setting Up Shortage Alerts and Notifications

Shortage Parameters

Items

Transaction Types

People

Shortage Alert


R12 Issue and Transfer Material


Module Objectives


• Perform Transactions

• Manage Receipts

• Perform Move Orders

• Perform Transactions Using a Mobile Device


Overview of Inventory Transactions

Material Flow Business flow

Receive goods

Ship goods

Move goods

Services Order management

Purchasing

Inventory

WIP


Inventory Transactions

MiscellaneousReceipt

MiscellaneousIssue

Organization 1

Subinventory Transfer

Subinventory 2

Locator 1

Locator 2

SubinventoryTransfer

Subinventory 1

Locator 1

Locator 2

Organization 2

Direct interorganizationtransfer

Interorganization transfer by way

of intransit


In-transit org transfer shipment

Inventory TransactionsWithout Documents and Requisitions

M1Seattle

D1Singapore

M3 Dallas(ave Cost)

FGI Stores

Subinv transfer

Subinv transfer

Direct org transfer

In-transit

Misc issue

Misc receipt

In-transit org transfer

receipt

Row 1, rack 1, bin 1Row 1, rack 1, bin 2Row 1, rack 2, bin 1 ...

Locators


Internal SO ship confirm

Inventory Transactionswith Documents and Requisitions

M1Seattle

D1Singapore

M3Dallas

FGI Stores

Move order:subinv transfer

Move order:subinv transfer

Internal SO ship confirmIn-transit

Move order issue

PO receipt

Internal PO receipt

Row 1, Rack 1, Bin 1Row 1, Rack 1, Bin 2Row 1, Rack 2, Bin 1 ...

Locators


Miscellaneous Transactions

You use miscellaneous transactions to issue material to or receive material from general ledger accounts in your current organization.

Receive items withoutdocumentation

Issue to material jobs or projects


Subinventory Transfer

You use the Subinventory Transfers to transfer material within your current organization between subinventories, or between two locators within the same subinventory.

Raw Materials Subinventory

Main Stores Subinventory


Inter-Organization Direct Shipment

You use direct inter-organization transfers to move inventory directly from a shipping organization to a destination organization.

Shipping organization



Inter-organization Intransit Shipment

Shipping Organization

Destination Organization

Intransit Shipment


Move Orders

Movement Request Movement


Generate Move Orders

Enter Move Order Information

Source Destination

Item Quantity


Move Order Allocating

• Where will the material come from?

• Use Inventory picking rules.

• Where will the material go?

• Use Item-Subinventory Locator Defaults.

Move OrderLine allocations

Move OrderLines

Allocating


Transact Move Orders

Source

Destination

Transact


Mobile Transactions

Mobile Device

Receive Goods

Move Goods

Issue Goods


R12 On-hand and Availability


Overview of On-hand Quantity

Subinventory: FGILocator: 1.1.1On-hand quantity: 19


Subinventory: BulkOn-hand quantity: 15



Overview of Availability

ReservationsPending

transactionsOn-handquantity

Availability = - -


Material Workbench

The material work bench enables you to view:

Material in receiving

On-hand quantities

Inbound material


Display Options

You can display on-hand quantities by:

• Location

• Item

• Cost Group (WMS enabled organizations only)

• Status

• LPN (WMS enabled organizations only)

• Serial

• Lot

• Grade


Material Workbench Transactions

You can use the material workbench to perform the following transactions:

• Status update

• Cost group transfer

• Grade update

and the following requests:

• Mass move

• Mass issue

• Cycle counting


Overview of Reservations

Supply source

Book sales order

Receive material

Demand source

Reservation


Reservation Types

Reservations

Organization

Reservation information

ReservationInformation

Organization

High-level reservation

Low-levelreservation


Supply Types

Internal requisition, purchase order, and

advanced shipment notice

Intransit shipment

Material in receiving

Process batch

ScheduleJob

On-handinventory


Demand Types

Sales order and internal order

Account andaccount alias

Inventory

Cycle count

Schedule

Job

User-defined


Reserving Material

Demand

Supply

Reservations


Reservation Management- Transfer Supply

Internal requisition,On-handinventory


Reservation Management- Transfer Demand

Sales orderSchedule


R12 Material Status


Material Status

Material status enables you to control the movement and usage of material for portions of your inventory.


Material Status Control Levels

Material Statuscontrol levels

Subinventory Locator

SN: 223356

Serial numberLot


Assigning Material Status Control to Subinventories and Locators

Subinventory Material Status:

ACTIVE

Locator: 2.2.8 Material Status: HOLD

Locator: 4.9.9 Material Status: ACTIVE

Subinventory Name: BULK


R12 Inventory Accuracy Fundamentals


Objectives

After completing this module you should be able to do the following:

• Create an ABC compile

• Define and maintain a cycle count

• Define a physical inventory

• Demonstrate count adjustments and approvals

• Understand inventory accuracy implementation considerations


Overview of Inventory Accuracy

ABC analysis

B CA

Physical inventory Cycle counting


ABC Analysis Overview

Importance Control

Higher

Lower

More

Less


Define and run an ABC compilation.

ABC Analysis Process Steps

Define ABC classes.

Define ABC group, assign items to ABC classes within a group.

Update item assignments.

Purge ABC information.

1

2

3

4

5

Defining an ABC Analysis


Cycle Counting Overview

The periodic counting of individual inventory items throughout the year.


Establish tolerances & other limits

Cycle Count Steps

Load items to be counted into cycle count classes

Schedule counts and generate count requests

Enter counts and report results

Manage count interface processes

Defining and Maintaining a Cycle Count

Define cycle count

Approve / reject cycle count


Cycle Count Approval Tolerance

Actual Count System On-hand Quantity


Approval Tolerances

System on-hand quantity

Actual count

- Quantity variance tolerance

Adjusted value

tolerance System on-hand quantity

actual count

-

X

Current item cost

=

=


Cycle Count Items

Class “C”Class “B”

ABC Group

Individual Items


Cycle Count Open Interface

Cycle Count Open Interface

Export Cycle Counts

Import Cycle Counts


Count Adjustments and Approvals

Enter Cycle Counts

Review tolerances

Make adjustments


Mobile Inventory Accuracy Overview


Physical Inventory Overview

Physical InventoryInventory

Organization Subinventory


Why Perform Physical Inventories?

• Accurate on-hand quantities are essential for effective planning and for minimizing inventory investment.

• Accurate on-hand quantities are required for tax and audit purposes.


Defining Physical Inventories

Physical inventory by subinventory

FGI subinventory

FGIPhysical

Inventory

Bulk subinventory

BulkPhysical

Inventory

M1 Seattle

M1 SeattlePhysical

Inventory

Complete organization physical inventory


Physical Inventory Tags

Inventory tags

Generate tags

Oracle Inventory


Inventory Snapshots

Physical inventory snapshot

• Required before you can generate inventory tags

• Saves all current on-hand quantities and costs

• Basis for all adjustments

• All tag counts are compared to the inventory snapshot


Entering Physical Inventory Counts

Count items

Physicalinventory

tags

Record count


Voiding Tags

Count items

Unused physicalinventory

tags

Void physicalinventory

tags

X


Approval Tolerances

Quantity variance tolerance• Quantity variance tolerance

= System-tracked on-hand quantity – actual tag count quantity

Adjustment value tolerance• Adjustment value tolerance

= (system on-hand quantity- actual count quantity) x current cost

Oracle Inventory supports two types of physical inventory approval tolerances:


Physical Inventory Adjustments

View

Reject or approve

Adjustments


Implementation Considerations

ABC Analysis

• Do you need to compile based on organization or subinventory?

• What ABC criterion will you use?

• What ABC scope will you use?

• What are your ABC class cut offs?



Cycle Counting

• How often should you perform a cycle count?

• Should you count the entire organization or individual subinventories?

• Which subinventories do you need to count?

• What are your tolerances and limits?

• Do you want to perform automatic scheduling?

• Do you want to perform automatic recounts?



Physical Inventory

• Do you need to perform a physical inventory?

• How often do you need to perform a physical inventory?

• Should you perform a physical inventory for the entire organization or for individual subinventories?

• Which subinventories should you perform the physical inventory?


R12 Replenishment Fundamentals


Objectives


• Perform forecasting

• Explain reorder-point planning

• Perform min-max planning

• Perform replenishment counting

• Generate kanban cards

• Identify Implementation Considerations


Overview of Inventory Planning

Time to replenish

• Min-Max planning

• Reorder-point planning

• Kanban replenishment

• Replenishment counting


Order Planning

Order time

“When should I order?”

Planning methods

“Which planning method should I use?”

Order size

“How much should I order?”


Replenishment Process for Intra-Org Supply Sources

Create allocations for inventory to be

moved

Print move order pick slip

Transact move order

Replenishment move order automatically

created


Replenishment Process for Supplier Supply Sources

External purchase requisition created

Run requisition import

Auto create purchase order

Approve purchase order

Receive material from supplier


Replenishment Process for Inter-Org Supply Sources

Ship confirm internal sales order

Receive material from other

organization

Run Order importRun Requisition import

Internal purchase requisition created

Pick release internal sales order


Replenishment Process for Product Supply Sources

Release work order

Complete work order when assembly finished

Work order created


Replenishment Methods

Replenishment Methods

Available Supply

Planning setup

Min-max

Reorder-point

Replenishment counting

Kanban replenishment

Available to Promise

Planning profile options


Overview of Inventory Forecasting

Inventory forecasting is the process of extrapolating the expected demand of an item over a number of periods in the future.

Supply Demand


Forecast Types

Time period

Demand

Statistics


Forecast Setup and Maintenance

Define forecast set

Focus and Statistical forecast setup and maintenance steps

Define forecast rules

Generate forecasts

Maintain forecasts

Use forecasts

1

2

3

4

5


Oracle Inventory Replenishment Methods

Reorder-point Planning• Safety stock• Replenishment lead time• Item demand• Order cost• Carrying cost

Min-Max Planning• Minimum inventory level• Maximum inventory level

Kanban ReplenishmentReplenishment by visual cue

Replenishment Counting• Nontracked subinventories• Locators in subinventories


Replenishment Methods Levels

Planning Method Organization Subinventory

Reorder-point Yes No

Min-Max Yes Yes

Replenishment Counting No Yes

Kanban N/A N/A


Reorder Point Planning

• Reorder Point Planning as the name suggests places an Order when the Inventory level falls to a predefined Re-order Point.

• The Order Size is equal to the EOQ. – The economic order quantity (EOQ) is a type of fixed order

quantity that determines the amount of an item to be purchased or manufactured at one time. The intent is to minimize the combined costs of acquiring and managing inventory.

• Reorder Point Planning is recommended for those items, which are not very expensive.


Economic Order Quantity

2 x annual demand x avg cost of order preparation

Annual inventory carrying cost percentage x unit costEOQ =


Overview of Reorder-Point Planning

Reorder-Point

Safety Stock

Quantity

Reorder Point = Safety Stock+Forecast demand during lead time

Time


Uses of Reorder-Point Planning

Item Definition

By Organization Independent Demand

Inexpensive Items


Reorder-Point Planning Steps

Enter item planning attributes.

Forecast item demand.

Define safety stocks.

Run Reorder-point report.

1

2

3

4


Overview of Min-Max Planning

Minimum inventory level

Time to orderBelow minimum!

Maximum inventory level


Min-Max Planning

Run Min-max report

Enter maximum quantity

Do you want specific lot

increments?

Determine minimum and maximum

quantities

Enter minimum quantity

Enter minimum order quantity

Enter fixed lot increments

Yes

No

Enter maximum order quantity


Min-Max Planning Steps

Enter item planning attributes.

Define subinventory-level min-max

information (optional).

Run the Min-max report.

1

2

3


Overview of Replenishment Counting

Organization

Subinventories

Replenishment Counting is a method of ordering items for non-tracked subinventories.


Replenishment Counting

– Replenishment Counting is a method of ordering Items for non-Tracked Subinventory.

– Non-Tracked subinventories are expense subinventory, for which On-hand balances are not maintained.

– Whenever an Item is moved into Expense Subinventory, the Expense account is charged and the quantity is discarded.

– Items are replenished in Non-Tracked Subinventory by periodically counting the items physically.


Replenishment Counting


Kanban

Replenishment

Mobile Replenishment Count Overview

Replenishment

Count

PAR

Count


Overview of PAR Counting

Organization

Subinventories

Locators


Overview of Kanban Planning

– Kanban is a Pull based replenishment in Manufacturing System.

– It leads to shorter lead times and reduced inventory.

– Kanban is typically applied to items with relatively constant demand and medium-to-high production volume.

– Kanban represents replenishment signals that are usually manual and highly visible like Color-coded Cards, Light and Empty bin.


Types of Kanban Replenishment

– Inter Org: Replenishes by creating Internal Requisition

– Intra Org: Triggers Material movement from a subinventory in the same Organization.

– Production: Creates or releases a Production Job

– Supplier: Creates a Purchase Requisition.


Kanban Elements

– Pull Sequence is a group of information that defines a Kanban location, source information, and planning parameters for an Item.

– Kanban chain is a series of Pull Sequences, which defines the replenishment network. E.g.: Assembly to Stores.

– Kanban Cards are created for Item, Subinventory and Locator (optional) and uniquely identified by a Kanban number

– Replenishable Cards can be created automatically through Pull Sequence or manually through ‘Kanban Cards’ window.


Kanban Replenishment Sources

KANBAN

Inter-Org

Flow Schedules

Intra-Org

Production

User Defined

Supplier