Inventory Management Concepts

From UG

Contents 1 Glossary 1.1 Inventory 1.2 Inventory Management Application 1.3 SKU 1.4 Part number 1.5 Build to stock 1.6 Build to order 1.7 Typology 1.8 Types of goods 1.9 VMI 2 Related wiki articles 3 Related books 3.1 Janat

Glossary

Inventory

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

Inventory Management Application

Inventory management applications has become a valuable tool for organizations looking to more efficiently manage stock. While the capabilities of applications vary, most inventory management applications give organizations a structured method of accounting for all incoming and outgoing inventory within their facilities. Organizations save a significant amount in costs associated with manual inventory counts, administrative errors and reductions in inventory stock-outs.

SKU

Stock Keeping Unit (SKU) is a unique combination of all the components that are assembled into the purchasable item. Therefore any change in the packaging or product is a new SKU. This level of detailed specification assists in managing inventory. See http://en.wikipedia.org/wiki/Stock_Keeping_Unit

Part number

A part number is a unique identifier of a part used in a particular industry. Its purpose is to simplify referencing to that part. A part number unambiguously defines a part within a single manufacturer. See http://en.wikipedia.org/wiki/Part_number

Build to stock

http://en.wikipedia.org/wiki/Build_to_stock

Build to order

http://en.wikipedia.org/wiki/Build_to_order

Typology

• Buffer/safety stock
• Cycle stock (Used in batch processes, it is the available inventory excluding buffer stock)
• De-coupling (Buffer stock that is held by both the supplier and the user)
• Anticipation stock (building up extra stock for periods of increased demand - e.g. ice cream for summer)
• Pipeline stock (goods still in transit or in the process of distribution - have left the factory but not arrived at the customer yet)

Types of goods

• Raw materials - materials and components scheduled for use in making a product.
• Work in process, WIP - materials and components that have begun their transformation to finished goods.
• Finished goods - goods ready for sale to customers.
• Goods for resale - returned goods that are salable.

VMI

VMI - Vendor-managed inventory. See also http://en.wikipedia.org/wiki/Vendor-managed_inventory.

Related wiki articles

• http://en.wikipedia.org/wiki/Stock_management
• http://en.wikipedia.org/wiki/Inventory
• http://en.wikipedia.org/wiki/Vendor-managed_inventory

Related books

Janat

• Supply Chain Management: Text and Cases By Janat Shah (http://books.google.com)