IEmmersion Webinar:

CONTROL AND Engr. Jaya Angeline

MANAGEMENT S. Merca
Admin Officer

OF September 05, 2022

INVENTORY 9:00 - 11:30 A.M.

Google Meet
 Learning Objectives
• What is Inventory?
• Functions of Inventory
• Inventory Management
• Inventory Control
• Inventory Management Techniques
• Inventory Control and Management Challenges
• Who is responsible?
• What do we plan?
• Benefits of Inventory Management
 What is
Inventory?
 What is Inventory?
• In a manufacturing organization, physical inventory is
classified as:
⚬ Raw Material
⚬ Work in process
⚬ Finished goods
⚬ Repair and spare
⚬ Maintenance, repair, and operations (MRO) items
 Functions of Inventory
• To meet anticipated demand
• To smooth production requirements
• To protect against stock-outs
• To take advantage of order cycles
• To help hedge against price increases
• To permit operations
• To take advantage of quantity discounts
What is inventory management?
It is a systematic approach to sourcing, storing, and
selling inventory - both raw materials (components) and
finished goods (products). It is the right stock at the
right levels, in the right place at the right time, and at the
right cost as well as price.
Inventory Management
• Inventory management is the management of inventory and
stock.
• Inventory management includes aspects such as controlling
and overseeing ordering inventory, storage of inventory, and
controlling the amount of product for sale.
• One of the most expensive assets of many companies
representing as much as 40% of total invested capital.
• Operations managers must balance inventory investment
and customer service.
 What is inventory control?
Inventory control also called stock control, is the process
of managing a company's inventory levels. It is to ensure to
keep the optimal amount of each product. Proper inventory
control can keep track of purchase orders and keep a
functional supply chain. Systems can be put in place to help
with forecasting and allow to set reorder points.
Inventory control includes:
• Barcode scanner integration
• Complete inventory counts
• Keeping track of physical inventory with
sales and purchases orders
• Product details, locations, and histories
• Reports and adjustments
 Inventory Management vs.
Inventory Control
Inventory Management
• It includes the business processes of
product replenishment and forecasting.
• Management encompasses when to reorder
products and how much product to order, to
avoid either stock-outs or holding too much
inventory.
• It ensures that the right inventory is in the
right place, at the right time, and in the
correct quantity.
Inventory Control
• Inventory control works with the inventory
already in a distributor’s warehouse.
• It requires knowing what products are in
your inventory and where it is located
within your warehouse.
• It ensures the inventory remains in good
condition and is organized in a way that
minimizes cost.
Inventory Management Techniques
• ABC Analysis
• Batch Tracking
• Bulk Shipments
• Consignment
• Cross-Docking
• Demand Forecasting
• Dropshipping
• Economic Order Quantity (EOQ)
• FIFO and LIFO
Inventory Management Techniques
• Just-In-Time Inventory (JIT)
• Lean Manufacturing
• Materials Requirements Planning (MRP)
• Minimum Order Quantity
• Reorder Point Formula
• Perpetual Inventory Management
• Safety Stock
• Six Sigma
• Lean Six Sigma
Inventory Control Challenges

• Finding the time and resources

• Visibility
• Human error
Inventory Management Challenges

• Getting Accurate Stock Details

• Poor Processes
• Changing Customer Demand
• Using Warehouse Space Well
Who is responsible?
Person/Department who is creating inventory that is
responsible:
• Sales/Marketing
• Purchase
• Manufacturing
 What do we plan?
• What is the gross requirement?
• What is the available balance?
• What is the net demand?
• What quantity will need to be ordered?
• When will the orders need to be received?
• When will the orders need to be released?
Benefits of Inventory Management

Saves Money

Improves Cash Flow

Satisfies Customers
Thank you for
listening!