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 SKU categorizing schemes 1.10 Stock points 1.11 Vendor 1.12 Service level 1.13 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.

SKU categorizing schemes

• ABC
• FSN
• VED

see #Janat

Stock points

Locations where stock could be stored.

Vendor

A vendor, or a supplier, is a supply chain management term meaning anyone who provides goods or services to a company. A vendor often manufactures inventoriable items, and sells those items to a customer.

http://en.wikipedia.org/wiki/Vendor_(supply_chain)

Service level

see #Janat

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)