In the previous installment, the author characterized the ways of addressing inventory issues in popular recording systems. The essential documents used during inventory recording and selected reports synthesizing the recorded situations were presented.
Characteristics of the analytical-recording
system group
A decidedly different approach is taken to inventory management in the case of systems belonging to the analytical-recording group, where the previously signaled inventory control algorithms are implemented. There is no uniformity in this group either.
There are systems that treat inventory issues from the recording side similarly to autonomous systems –
by registering stock levels (inventory) based on warehouse documents, without possessing functionality typical of warehouse logistics areas. They are, however, equipped with sophisticated functionality related to planning inventory levels by constantly examining their current and required levels, generating net orders in such quantities and at such times that the resulting inventory is maintained at the assumed level. Records in the Master Planning Schedule (MPS) are then taken into account, as well as dependent and independent gross requirements, existing inventory, allocated inventory, inventory in transit, etc.
For example, in the Navision XAL system, the central function of the INVENTORY module is the registration of all goods movements throughout the system. Data on batches of goods, reservations, purchases, production, and orders are collected here, which create a comprehensive picture of the warehouse status. Thanks to clear forms, one can very quickly obtain all information about a specific item – including delivery fulfillment capabilities or the date of the next expected delivery. The item card contains basic data on goods, services, and bills of materials (bill of materials – also known as a recipe or kit).
A significant portion of goods receipts and issues is automatically recorded in the Navision XAL INVENTORY module thanks to other modules. All inventory originating from purchases and production is recorded with the batch number of the given item in a given warehouse. The batch numbering of goods is entered at the moment of purchase or production of the item, which consequently enables tracking where the item from a given batch was used or in which finished products it was used as a component.
The basic core in the system’s construction is inventory replenishment analysis. Demand analysis is performed based on collected orders, executed purchases, started production, current warehouse stocks, and the budget for goods, so that the system can determine when and how many pieces of goods are needed. After determining what is needed, the system suggests launching production – if the item is a manufactured product, or its purchase. For bills of materials, individual components of the list are taken into account, and for planned production, an adjustment is made for potential losses, so during demand analysis, a complete picture of needs broken down into the smallest elements is obtained (this is functionality typical of the MRP I method).
Navision XAL enables several ABC classifications, including classification of goods according to the share of costs of individual goods in total inventory costs, turnover, bottlenecks, etc. This classification can cover any period of time and have a specified individual percentage specification for the ABC classification. ABC analysis can be carried out based on actual data as well as based on demand calculation.
The article comes from the magazine “Logistyka” 3/2003.