MANAGING INVENTORY

By Chintu Francis

MANAGING INVENTORY

Inventory management is the process of efficiently overseeing the constant flow of unit into and out of an existing inventory.

CLASSIFICATION
PRODUCTION INVENTORY

FINISHED GOODS INVENTORY

MANAGING INVENTORY

MRO INVENTORY

IN-PROCESS INVENTORY

Production Inventory
Production process

Input

Output

Production inventory refers to your level of material and supplies on hand for use in manufacturing production This include raw material and part of components are directly used in the production process and go into making the finished product. They either consist of standard item sourced of the shelf or special tailor made items

MRO Inventory
MRO stands for maintenances, repair and operating supplies. These items are require in the production process although they do not go into making the final product. They include i. Consumable which are usually available off the shelf and are used more than one department. They include lubricating oil safety item, electrical items etc ii. Spare part requirements is determined by the nature of the spare and may often led to a huge loss to the organization if not present iii. Packing materials is used to lifting and to protect the product. But in some industries. Packing material considered a part of raw material and a part of consumables

In-process Inventory
It is also called WORK IN PROGRESS (WIP) inventory. It comprises of the semi-finished products formed at various stages of production process. Typically, the output of one stage in an assembly line is the input for the next stage

Finished goods inventory

This comprises all the finished product made by the company, ready for shipment and sale