Inventory Management In Manufacturing - Slow & Plain English

Planning in Manufacturing and Supply Chain

What you'll learn
Inventory Definition & Type of Inventory by Use
Inventory Classification and relevance to Planning & Execution
Evolution of Material planning: Context
Quantity based Planning methods (EOQ, POQ, VIsual etc)
Demand based Planning methods (TPOP & MRP)
Lot Sizing Techniques
Safety Stock Techniques
Inventory Valuation
Inventory Accuracy
Inventory Performance Measurement
Requirements
Any Fresher is welcome as this is a course on fundamentals.
Basic knowledge of how Manufacturing works is a plus
Understanding of Bill of Material and Routing is required
Description
In a Manufacturing Industry, you will be using multiple types of materials to make and sell your Products. Each type of material according to it's use, will have to be planned for fulfillment, storage, usage in Manufacturing and selling the main products. Various types of material such as Raw material, Finished material, sub-assembly or semi-finished material and MRO etc are to be handled in different ways in terms of planning, storing, valuations and managing their inventories. Hence planning of materials for making and selling product and planning of the product (finished items) themselves needed multiple levels of strategy to ensure you keep the customer satisfied and at the same time, keep your financial parameters in control. You hence needed to understand the functions of multiple types of inventories to determine the kind of controls you want to apply. Understanding on various types of materials helps in that aspect. In addition, the special classifications such as ABC Analysis can consolidate the kind of material that need maximum attention and those that can have relatively loose controls. In other words ABC classification helps you determine the level of Inventory Policies and controls to apply on specific group of ItemsThe planning of the materials was quite preliminary before 1960's. Those days, the planning was just reactive on the basis of inventory stock levels. the review of stocks was also done only on basis of stock level of each item without any consideration on dependencies among the items handled in your organization. For example, you plan laminations, Wood and bolts at individual levels without acknowledging that all of them together may be required to make a piece of furniture such as Table, Chair etc. The assumption made in these reactive inventory planning methods were not at all close to real business scenarios. Hence planning used to fail many times. Or to avoid the risks you might be purchasing huge quantities of materials. in both cases the results will lead to financial losses in terms of loss of customers or loss of investment due to huge inventory costs. The evolution planning to more and more matured levels was from the basic order point system to Time phased order point (which looked at timing of order in addition to tracking stock levels) and Material requirement planning - MRP (which in addition to TPOP way of working, added the "Kit based planning". There are a few more enhancements to the planning that included Constraint based planning . You also have another concept of reaching NO INVENTORY state, in what is called Just in Time - JIT environment  by removing all inefficiencies causing the need to hold inventories. The course will cover the above aspects in a structured form.You start with Inventory definition and appreciate the need to perform inventory management. After that you will run through a few popular Inventory types and how they are handled in relation to manufacturing environment. You will than go through Inventory classification based on which the level of control to be applied on each class of the inventory is determined. The context of how planning is evolved over a period of time is briefed after covering the inventory aspects in above sets of lessonsA few quantity or stock based order review methods (such as Re-Order Point, Period Order Quantity , Two Bin System etc) are introduced.This set of lessons is followed by a few Demand based order review methods which included TPOP - Time phased Order point method and most comprehensive planning method - MRP as well.Popular Lot sizing techniques are explained with relevant illustrations for most of the methods. While explaining the Selection factors for each techniques, some influencing factors  are briefed. You may want to know how Safety Stock is planned and calculated to handle unforeseen demand. One section Safety stock calculations will provide insight on demand analysis, demand variations and safety stock calculations. Section on Inventory Valuation has lessons explaining the post popular accounting techniques for Inventory, such as LIFO, FIFO, Standard Costing, Average Costing and Process costing etc. You will go through example valuations for most of these methods. With understanding that all your planning and calculations need accuracy of inputs such as Inventory data, the section Inventory accuracy provides fair understanding on Inventory accuracy and important Inventory counting and correction methods such as Physical or Annual Inventory, Cycle Counting and combinations. For each method, sample counting techniques, report analysis are explained through an example scenario. Finally you need to know how is your Inventory Management Performance. Lessons in this section explain the performance metrics that directly or indirectly reflect the Inventory Management performance. The metrics such as Inventory turnover ratio provide indirect measure of sales and delivery performance, whereas other metrics such as Customer service directly reflect the performance of sales and Manufacturing. You will go through many examples and calculations in this section as well. The Course is associated with a Practice KIT of 75 Questions and answers along with explanation for each of the Questions in the Kit. These explanations themselves act as additional notes for the students benefit when they prepare for Certifications in space of  Production and Inventory Management and Supply Chain Practice etc. The curriculum in details is :Course content7 sections • 26 lectures • 2h 52m total lengthIntroduction: Context of Planning in Manufacturing & Supply Chain2 lectures • 11minInventory Definition and contextPreviewMajor drivers of Inventory ManagementTypes of Inventory7 lectures • 20minRaw MaterialsSemi-Finished MaterialWork in progress (WIP) MaterialsFinished MaterialsConsigned MaterialsMaintenance, Repair and Operational supply MaterialsSpecial types (Excess Inventory, Obsolete, Non-Confirmed Material )Inventory Classification2 lectures • 6minInventory Classifications on basis of Multiple factorsClassification Based on Value and Consumption rates (ABC, Fast-Slow Moving etc)Section 1 Recap and Summary1 lecture • 2minRecap and SummaryOrder Review and Planning Methods: Context5 lectures • 21minContext (Evolution of Planning Over a period)Illustration of a typical Order Fulfilment CycleDependencies and Uncertainties in planningKey terminology in Order fulfilmentSection Recap and SummaryStock based Material review methods6 lectures • 18minContext and AgendaOrder Point based Review methodPeriodic Review SystemHybrid Review System (Combination of Order Point and Periodic Review)Visual Review based Order methodsSection Recap and ConclusionsDemand and Stock based Review Systems (TPOP and MRP)5 lectures • 37minContextTime Phased Order Point (TPOP): Introduction and how it worksTPOP IllustrationsTPOP CharacteristicsMaterial requirement planning (MRP)Lot Sizing Techniques (5 lectures • 41minSection AgendaLot Sizing Techniques overviewDemand Rate Oriented Lot Sizing TechniquesDiscrete Lot Sizing Techniques Section RecapSafety Stock Techniques (13 lectures • 44 minSection AhendaSafety Stock Considerations (importance)Demand AnalysisDemand VariationsDemand Variations: Mean Absolute Deviation (MAD)Demand Variations: Standard Deviation (SD)Tracking SignalSafety Stock calculations -BriefSafety Stock Calculations-StatisticalSafety Stock Calculations - Time Period BasedSafety Stock Calculations - Safety Lead timeSafety Stock Calculations -Some Key NotesConclusionInventory Valuation Techniques (8 lectures • 51 min)Context Ways of establishing Inventory holdingInventory Valuation techniquesFIFOLIFOStandard CostingAverage CostingProcess CostingSection RecapInventory Accuracy (30 Lectures - 97 min)Inventory Accuracy - Introduction and Section ContentInventory Accuracy - Importance of Inventory AccuracyInventory Accuracy - PrerequisitesInventory Accuracy PI - Physical Inventory (Annual Inventory)Inventory Accuracy - Physical InventoryInventory Accuracy - Physical Inventory : ProcessInventory Accuracy -Physical Inventory : ExamplesInventory Accuracy - Physical Inventory: Pros and ConsInventory Accuracy CT- Cycle CountingCycle Counting - Snapshot of Cycle CountingCycle Counting - ABC Class based Counting ProcessCycle Counting - Pros and ConsCycle Counting - Other ApproachesCycle Counting - Samples and Examples Cycle Counting: Example of ABC AnalysisCycle Counting - Sample Cycle Count SheetCycle Counting: Sample Cycle Count report evaluationInventory Accuracy - Conclusion RecapReferencesInventory Performance Measurement (7 lectures • 27 min)Inventory Performance Measurement: Section ContentsImportance of Inventory Performance MeasurementInventory Turnover Rate (ITR)Customer Service LevelInventory AccuracyOther Inventory Performance MetricsConclusionThe course included a few quiz sections to help the students refresh their understanding.This course helps many students who are aspiring for certifications in the domains of Production & Inventory Management, Supply Chain Management or any other subject relevant to this topic. We want to make a clear disclaimer that we are not associated with organization that provide certifications in the relevant domains.

Overview

Section 1: Introduction: Context of Planning in Manufacturing & Supply Chain

Lecture 1 Inventory Definition and context

Lecture 2 Major drivers of Inventory Management

Section 2: Types of Inventory

Lecture 3 Inventory Classifications on basis of Multiple factors

Lecture 4 Raw Materials

Lecture 5 Semi-Finished Material

Lecture 6 Work in progress (WIP) Materials

Lecture 7 Finished Materials

Lecture 8 Consigned Materials

Lecture 9 Maintenance, Repair and Operational supply Materials

Lecture 10 Special types (Excess Inventory, Obsolete, Non-Confirmed Material )

Section 3: Inventory Classification

Lecture 11 Classification Based on Value and Consumption rates

Section 4: Section 1 Recap and Summary

Lecture 12 Recap and Summary

Section 5: Order Review and Planning Methods: Context

Lecture 13 Context

Lecture 14 Illustration of a typical Order Fulfilment Cycle

Lecture 15 Dependencies and Uncertainties in planning

Lecture 16 Key terminology in Order fulfilment

Lecture 17 Section Recap and Summary

Section 6: Stock based Material review methods

Lecture 18 Context and Agenda

Lecture 19 Order Point based Review method

Lecture 20 Periodic Review System

Lecture 21 Hybrid Review System (Combination of Order Point and Periodic Review)

Lecture 22 Visual Review based Order methods

Lecture 23 Section Recap and Conclusions

Section 7: Demand and Stock based Review Systems (TPOP and MRP)

Lecture 24 Context

Lecture 25 Time Phased Order Point (TPOP):

Lecture 26 Material requirement planning (MRP)

Section 8: Lot Sizing

Lecture 27 Section Agenda

Lecture 28 Overview of Popular Lot sizing techniques

Lecture 29 Demand-Rate Oriented Lot Sizing Techniques

Lecture 30 Discrete Lot Sizing Techniques

Lecture 31 Batching Rules

Lecture 32 Section Summary

Section 9: Safety Stock Techniques

Lecture 33 Section Ahenda

Lecture 34 Safety Stock Considerations (importance)

Lecture 35 Demand Analysis

Lecture 36 Demand Variations

Lecture 37 Demand Variations: Mean Absolute Deviation (MAD)

Lecture 38 Demand Variations: Standard Deviation (SD)

Lecture 39 Tracking Signal

Lecture 40 Safety Stock calculations -Brief

Lecture 41 Safety Stock Calculations-Statistical

Lecture 42 Safety Stock Calculations - Time Period Based

Lecture 43 Safety Stock Calculations - Safety Lead time

Lecture 44 Safety Stock Calculations -Some Key Notes

Lecture 45 Conclusion

Section 10: Inventory Valuation

Lecture 46 Introduction and Section Content

Lecture 47 Definitions - Inventory Holding, Valuation

Lecture 48 Inventory Valuation - First In First Out

Lecture 49 Inventory Valuation - Last In First Out

Lecture 50 Inventory Valuation - Standard Costing

Lecture 51 Inventory Valuation - Average Costing

Lecture 52 Inventory Valuation - Process Costing

Lecture 53 Inventory Valuation - Conclusion

Section 11: Inventory Accuracy - Introduction Section

Lecture 54 Inventory Accuracy - Introduction and Section Content

Lecture 55 Inventory Accuracy - Importance of Inventory Accuracy

Lecture 56 Inventory Accuracy- What is avoided by Inventory Accuracy?

Lecture 57 Inventory Accuracy - Elements of Accuracy

Lecture 58 Inventory Accuracy - Prerequisites

Lecture 59 Inventory Accuracy - Best Practices (Pre-requisites)

Lecture 60 Inventory Accuracy - Inventory Measurement

Section 12: Inventory Accuracy PI - Physical Inventory (Annual Inventory)

Lecture 61 Inventory Accuracy - Physical Inventory

Lecture 62 Inventory Accuracy - Physical Inventory : Process

Lecture 63 Inventory Accuracy - Physical Inventory: Preparation

Lecture 64 Inventory Accuracy - Physical Inventory: Execution

Lecture 65 Inventory Accuracy - Physical Inventory : Report Analysis

Lecture 66 Inventory Accuracy -Physical Inventory : Examples

Lecture 67 Inventory Accuracy - Physical Inventory: Pros and Cons

Section 13: Inventory Accuracy CT- Cycle Counting

Lecture 68 Cycle Counting - Definitions

Lecture 69 Cycle Counting - Snapshot of Cycle Counting

Lecture 70 Cycle Counting - Objectives

Lecture 71 Cycle Counting - Cycle Counting Approaches

Lecture 72 Cycle Counting - Random Sampling based Counting Method

Lecture 73 Cycle Counting - ABC Class based Counting

Lecture 74 Cycle Counting - Preparation Phase

Lecture 75 Cycle Counting: - Execution Phase

Lecture 76 Best Practices

Lecture 77 Cycle Counting - Pros and Cons

Lecture 78 Cycle Counting - Other Approaches

Section 14: Inventory Accuracy - Cycle Counting - Samples and Examples

Lecture 79 Cycle Counting: Example of ABC Analysis

Lecture 80 Cycle Counting - Sample Cycle Count Sheet

Lecture 81 Cycle Counting: Sample Cycle Count report evaluation

Section 15: Inventory Accuracy - Conclusion

Lecture 82 Recap

Lecture 83 References

Section 16: Inventory Policies

Lecture 84 Inventory Policies - Section Context and Agenda

Lecture 85 Definition and Key aspects

Lecture 86 Stock Reviews - Policies and Guidelines

Lecture 87 Customer Service Level - Introduction

Lecture 88 Customer Service Level - Key Terms

Lecture 89 Customer Service Level - Key Notes

Lecture 90 Customer Service Level - Vendor Performance & Cost of Service

Lecture 91 Inventory Accuracy - Policies and Guidelines

Section 17: Inventory Performance Measurement

Lecture 92 Inventory Performance Measurement: Section Contents

Lecture 93 Importance of Inventory Performance Measurement

Lecture 94 Inventory Turnover Rate (ITR)

Lecture 95 Customer Service Level

Lecture 96 Inventory Accuracy

Lecture 97 Other Inventory Performance Metrics

Lecture 98 Conclusion

Section 18: Practice Kit

Freshers aspiring for careers in Manufacturing, Supply Chain and Inventory Management,Aspirants of certifications in domains of Production & Inventory Management and Supply Chain management may find it useful,Students experienced in Manufacturing industry in Non-Production and Planning departments,Students educated in Production & Industrial engineering or other such disciplines,ERP consultants who want to learn the basics of Manufacturing and Planning domain