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A stock of items held to meet future demand

Inventory is a list for goods and materials, or those goods and materials themselves, held available in stock by a business.

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Work inprocess

Work inprocess

Work inprocess

Finishedgoods

RawMaterials

Vendors Customer

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Raw Materials – Basic inputs that are converted into finished product through the manufacturing process

Work-in-progress – Semi-manufactured products need some more works before they become finished goods for sale

Finished Goods – Completely manufactured products ready for sale

Supplies – Office and plant cleaning materials not directly enter production but are necessary for production process and do not involve significant investment.

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Ensure a continuous supply of raw materials to facilitate uninterrupted production

Maintain sufficient stocks of raw materials in periods of short supply and anticipate price changes

Maintain sufficient finished goods inventory for smooth sales operation, and efficient customer service

Minimize the carrying cost and time Control investment in inventories and keep it at

an optimum level

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Meet variations in customer demand:◦ Meet unexpected demand◦ Smooth seasonal or cyclical demand

Pricing related:◦ Temporary price discounts◦ Hedge against price increases◦ Take advantage of quantity discounts

Process & supply surprises◦ Internal – upsets in parts of or our own processes◦ External – delays in incoming goods

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To maintain a optimum size of inventory for efficient and smooth production and sales operations

To maintain a minimum investment in inventories to maximize the profitability

Effort should be made to place an order at the right time with right source to acquire the right quantity at the right price and right quality

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-Track inventory

–How much to order

–When to order

When a submarine arrives at the Pearl Harbor Naval Shipyard (PHNSY), it undergoes a well-planned schedule of maintenance, overhaul, repairs, and upgrades.

On-time completion of these and other maintenance-type operations play a major role in maintaining the readiness of submarines in the Pacific.

To ensure these critical deadlines are met, PHNSY relies on skilled mechanics in three shifts a day and some weekends.

According to Iris Seiki, PHNSY Supply Systems Analyst, not having inventory readily available for the mechanics on all three shifts and weekends has a direct impact on the project and on other people's job.

Problems:

•stores tooling, personal protective equipment (PPE), and consumable products in centrally located tool rooms.

•With the exception of the occasional walk and wait time to and from the waterfront tool room, getting the needed items for the task at hand was generally a simple process

•Because the tool room was staffed for the first shift only, getting materials was somewhat more complicated for the other shifts.

• If the mechanic from the previous shift didn't turn over the materials to the next shift, he/she would have to submit an item request for the needed materials for the task at hand.

•the materials came 24 hours later.

Problems:

-Work stoppage due to inefficient processes

-Wasted time walking to and from tool room

-Inventory shrinkage

PHNSY looked to WinWare, Inc., the makers of CribMaster to provide a solution.

CribMaster is a set of inventory solutions used in military and other industrial-type environments.

In their search for a storage system that offered flexibility, PHNSY chose a suite of ToolCube™ point-of-use devices

Located them dockside where the submarines undergo maintenance.

The ToolCube™ is a large, heavy- gauge-steel constructed cabinet that contains drawers and compartments of various sizes

Tasks performed by ToolcubeTM

•The mechanic simply scans his/her badge and selects the item requested.

• CribMaster then provides access to only the approved quantity of the exact item requested.

• With the ToolCube's™ unique storage system of configurable drawers, PHNSY could accommodate many different types of inventory.

•The capability of adding more devices as their operation grew and controls needed to be tightened.

Stock-outs in their consumable materials have been greatly reduced.

The min/max feature on the software ensures optimum inventory levels by sending an email alerting someone when replenishment is needed.

More importantly from the mechanics point of view, they enjoy having the right material at the right time 24 hours a day, 7 days a week.

This has allowed them to do their job regardless of which shift they are working and allowed PHNSY to control material usage all at the same time.

CASE STUDY - BOEING (UK)

Unrivaled Accuracy: RGIS Pilots Inventory Program for UK

CH-47 Chinook

CHALLENGES:

-In May of 2006, Boeing formally commenced work on the “Through Life Customer Support” programme for the Royal Air Force’s (RAF’s) fleet of Chinook helicopters.

-Boeing had previously manufactured and sold the Chinook helicopters and parts to the RAF.

-Prior to the awarding of this maintenance contract to Boeing, the RAF maintained these helicopters in-house and managed the tracking of parts in stock with two inventory systems.

-The value of the parts varies from a few pence to over £1,000,000 per item.

-The parts are located on RAF/MOD installations in the U.K. and around the world.

CHALLENGES:

-The information had to be viewed separately, consolidated, and then reported globally back to Boeing and the MOD.

- Parts in stock are assigned a designated location within a base.

-For security reasons, an individual stock item may have several locations within a base.

-This meant there was no central view of which parts were at which base, or at what location(s) on a base a part was stored. 

SOLUTION:

-RGIS staff members worked with Boeing, RAF/MOD, and DARA to complete this project.

- RGIS provided auditors along with managers and operations support personnel working across five U.K. bases.

-The RGIS program was divided in three steps:

The RGIS Process Pre-InventoryThe RGIS Process Inventory: The RGIS Process Post-Inventory: 

The RGIS Process Pre-Inventory:

• RGIS worked with Boeing in a tight schedule window, to accomplish the inventory in one week less than was initially required. 

•Scheduling challenges included the following:

>The very limited availability of RAF/MOD and DARA staff, who were required to assist with locating and opening some parts containers

>The requirement that the same part had to be counted in all locations around the world at one time

>Part counting had to be completed in a specified four-hour window or else that count would be invalidated in other locations.

>RGIS created a custom inventory programme to facilitate the many and varied streams of information that were required

The RGIS Process Inventory:

•RGIS captured and reconciled the data at the five U.K. bases.

•Parts were categorized according to class and condition and whether the item was removed from an aircraft for repair.

•Counts were compared to the quantities on record in the RAF databases

•Variance reports were generated in real time. •Items showing discrepancies were recounted.

•Fully reconciled data had to be made available twice daily.

The RGIS Process Post-Inventory: 

•RGIS provided Boeing with a consolidated file showing the global position of each parts line captured compared to the quantity expected at the time the item was counted.

•Interim reports and final information were provided on the secure Boeing website for ease of access by those with permission to view the data.

•Boeing and the MOD were able to obtain an accurate inventory count

•They could more readily identify where they would have an urgent and immediate need for parts.

BENEFITS:

•RGIS provided an accurate, reliable and efficient inventory resulting in improved product availability and process improvements for the future.

•Excellent track record in accurate and consistent data-gathering techniques across multiple sites

•Proven scheduling flexibility

•Effectiveness in working with multiple project partners

•Efficient project coordination and data reconciliation abilities

•Employee integrity

•RGIS provided an inventory program that helped Boeing reduce their costs and improve their processes. 

Case StudyInventory Management System

Manufacturing CompanyProblems:

•A global manufacturing company was experiencing inefficiencies in in its inventory management processes.

•With suppliers across the world delivering parts for the company's products

•Multiple buyers within the company are responsible for tracking the parts required for each product from the manufacturing phase through delivery

•The company needed a way to keep a master list of all inventory with easy access to parts' delivery statuses and other pertinent information relevant to the company. 

Approach:

•Aciron initiated the project by holding extensive interviews with client personnel to understand the company’s needs and challenges.

•Aciron followed an agile, iterative, approach to application development

•Allowing the client to regularly review and make adjustments to the application, and to easily incorporate the clients' evolving requirements. 

•Throughout the project, Aciron focused on open communication, with regular status reports and meetings.

•Consistently engaging key client personnel and ensuring project milestones were met on time and within budget.

Solution:

•Aciron developed a custom database driven inventory management application

•Application enables the company's multiple buyers, regardless of their locations, to easily track, manage, and generate reports regarding the company's inventory and deliveries

•The user interface of the application was developed to be clean and user-friendly, enabling users to easily navigate and utilize the system.

•The intuitive automated system provides the client with a rapid, accurate, and efficient means to collect, process, transmit, record, and manage inventory data.

•Providing a clear view of any inventory shortages and delays, along with comprehensive communication tools

•The system eliminates the need to rely on traditional means of communications, such as phone and email, etc., to manage such delays

•The system also includes an extensive set of reporting mechanisms to allow the planners, project managers, operations managers, and buyers to more effectively maintain inventory.

Benefits:

•With on-demand access to up-to-date detailed data on the company's inventory, the client is able to make more informed decisions.

•While reducing costs and inefficiency within the company. In addition, as a browser based application

•The system eliminates the inefficiencies inherent in using multiple spreadsheets and manual processes involved in tracking and managing inventory by creating one secure, central solution.

•Since completion, the system has proved to be a critical business application for the client, driving productivity and increasing margins, while reducing costs