| Various materials used as inputs, such as raw | | | | being delivered. Kitting suppliers are either suppliers |
| materials, consumables and spares, are required to be | | | | with dominant kit content, specialist kit consolidators, |
| purchased and made available to the shops as and | | | | or increasingly part of a wholly outsourced stores |
| when needed to ensure uninterrupted production. | | | | operation. |
| Push and pull systems are the two important | | | | Milk round "Ex-works costing" has facilitated the |
| techniques used in materials management | | | | carrier to create a milk round, delivering and collecting |
| Pull Systems | | | | goods on a daily or weekly cycle, ensuring full loads |
| Pull systems are a group of techniques that aim to | | | | at all times. An in-house customer can often arrange |
| ensure that when stock is used, it is replenished. | | | | to collect raw materials in the vicinity of their |
| Most of the "pull" techniques operate principally using | | | | important customers, or other suppliers, to gain |
| visual controls rather than computer systems and are | | | | economy of scale. |
| therefore well aligned to "lean manufacturing". | | | | Visual control systems Along with the introduction of |
| Replacement It replaces used items. This technique is | | | | lean thinking has come response to the need to |
| commonly used for maintenance spares, grocery | | | | automate the stock issuing process in conjunction |
| shelf restocking, stationery and my partner's | | | | with the introduction of JIT techniques. This has also |
| re-supply of our bathroom consumables, and was | | | | been used as a basis for paying suppliers. By doing |
| probably used by cave dwellers to replenish food | | | | this, a situation has been created where the Bill of |
| stocks. This is also the underlying principle of | | | | Material accuracy for these inexpensive parts must |
| "Kanban" systems | | | | be totally accurate. |
| Vendor managed inventory It is now very common | | | | Enterprise Resources planning systems grew out of |
| for suppliers to manage customer's inventory by | | | | MRP and or Inventory Management and or |
| managing the stock levels themselves as a value | | | | Accounting systems in the early 1990's depending on |
| added service to customers. Usually this replacement | | | | the pedigree of the software supplier into a "total" |
| is based on simple top up to predetermined levels or | | | | business control system integrating the functions and |
| by a Fax-Ban. | | | | data from various areas. |
| Top up point of use It is now very common for | | | | Inventory Management By achieving accurate visibility |
| suppliers to manage customer's inventory, replacing | | | | and effective control over inventory, and setting |
| used items by delivering directly to point of use, | | | | prices on a customer-by-customer basis, you can |
| avoiding the stores management process as a value | | | | reduce operating costs and achieve the fast, efficient |
| added service to customers. | | | | fulfillment that keeps customers coming back. |
| Input /Output control simply delivers inputs to a | | | | Extended Pricing helps to |
| process what has been produced output. When | | | | -Create standard price schemas such as percentage |
| applied to Work in Process as a whole, this technique | | | | off, value off and net pricing, along with personalized |
| has come to be known as a "Conwip" (Constant | | | | pricing options. |
| WIP) Kanban system. | | | | -Implement powerful date-sensitive functionality for |
| 2 bin systems There are 2 "bins" in the system | | | | sales and promotions. |
| Bin 1 is in use in the shop. | | | | -Navigate the system using drilldown, zoom, and |
| Bin 2 is somewhere and is used to replace bin 1 when | | | | special menu capabilities that offer a fast learning |
| it is depleted. | | | | curve, and easy visibility into your pricing index. |
| Bin 1 is then refilled and held waiting for the depletion | | | | Bill of Materials to |
| of the bin in use. | | | | -Define the exact order of assembly process, |
| 3 bin systems It operates in the same way as 2 bin | | | | -Attach electronic notes to bills to detail exact |
| systems except that a safety stock is stored | | | | component use |
| separately in the third bin. Breaking into the safety | | | | -Track the actual cost for assembled items, |
| stock triggers an expedite request and a review of | | | | -Plan for future changes, and manage current and |
| bin sizes. | | | | past items. |
| Kanban systems They are an extension of 2 and 3 | | | | -Schedule transactions into the future without |
| bin systems, where there is a semi-fixed number of | | | | reserving stock. |
| containers in the system, which may be spread | | | | Cradle-to-Grave Serial/Lot Tracking helps to |
| throughout the system and which are replenished | | | | -Increase visibility into serial/lot number lifecycles. |
| when depleted. | | | | -Conduct powerful searches using an item's serial or |
| Reorder point systems It is asophisticated simple | | | | lot number. |
| replenishment processes by taking into account the | | | | -Complete widespread searches across all |
| variability of supply and demand ,lead-time to | | | | transactions, including bill of materials and customer |
| replenish, the reorder-point where allowing for the | | | | orders. |
| lead-time and forecast demand they would be | | | | -Consolidate like lot numbers in all log number entry |
| available before using the safety stock. | | | | windows |
| Push Systems | | | | Shelf Life Controls and automated alerts to ensure |
| All time buy It is difficult to forecast all time | | | | expired lots are not selected for distribution. |
| requirements. However for items which are likely to | | | | Serial/Lot Number Tracking Initiate traces using an |
| be difficult to acquire in the future and are of low | | | | item's serial or lot number and view where and when |
| value, this is still a widely used technique, particularly | | | | the number occurred in bills of materials, customer |
| in the aerospace and electronics industries. | | | | orders, or any other transaction. |
| Project manufacturing Very different in concept to | | | | Item Classing Create and track the item information |
| MRP systems, and much better suited to small | | | | that's most important to you with the ability to |
| volume production, or engineer to order | | | | choose default entries for classes of items such as |
| environments, this system schedules both parts and | | | | color, style, and manufacturer. |
| processes. Bills of material are created for each | | | | Inventory Ranking by prioritizing sales stock with |
| "chunk" of the project, and capacity planning includes | | | | options to rank your inventory items by usage value, |
| engineering resource as well as manufacturing | | | | actual or project usage quantity, on-hand inventory |
| resource. | | | | value, or unit cost. |
| Drum, buffer, rope The 'Drum' is the schedule for the | | | | Quality Controls maintain complete control over your |
| bottleneck. The 'Buffer' is surplus stock put in front | | | | inventory with quantity tracking at the bin level, cycle |
| of the bottleneck to make sure it never runs out. | | | | counting, stock count calendars, and inventory |
| The Rope is the coupling mechanism for ensuring that | | | | snapshots. |
| inputs do not exceed the bottleneck capacity, | | | | Bin Lookups quickly determine which bin to use based |
| avoiding build-ups of unnecessary WIP. Drum, buffer, | | | | on bin priorities and maximum capacities and accept |
| rope can be implemented in its own right manually. In | | | | or override system recommendations. |
| this case the Drum is an MPS for the system based | | | | Multi-bin Tracking track a single inventory item across |
| on a rough cut capacity plan for the bottlenecks | | | | multiple bins within the warehouse to optimise picking |
| Other Complementary techniques | | | | efficiency. |
| It includes the following techniques. | | | | Real-time Moving Average Cost is calculated as many |
| Consignment stocks was adopted by customers who | | | | times as the purchase receipt changes - and then |
| wanted to loose inventory from their balance sheet, | | | | simultaneously generates general ledger adjustments |
| giving rise to bonded warehouses where the stock | | | | for inventory. |
| was available but still belonged to the supplier until | | | | Instant Access to Transaction Information related to |
| issued for use in the shop. the benefit is largely in the | | | | any item we define in the inquiry windows - including |
| supplier's hands rather than with the customer. Sales | | | | lot number, price levels, and item type - and drill |
| and purchasing departments continue to use | | | | down to specific details as needed. Query originating |
| consignment stocks as a bargaining chip and a way | | | | documents and drill down for details about operations |
| of losing stock from the inventory respectively. | | | | from across your business - such as project |
| 3rd party kitting Often combined with 2 bin systems, | | | | accounting, manufacturing, ; or field service. |
| one kit can be prepared, whilst the previous one is | | | | |