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程晓华先生,山东青岛人,2年国企技术员经历,16年生产与库存控制、采购与物流管理经验,曾经在DaewooDunham-BushIBMFlextronics 等担任计划员、采购主管、高级需求与供应链经理、全球物料总监等职务;1993年哈尔滨科学技术大学毕业,工学学士、双专业,2003年北京大学MBA结业;2007年出版个人专著《制造业库存控制技巧》,2011年第二版再印。

Mail/MSN: johnchengbj@live.cn

 

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--lt2860722805
hhhh--爬行的蜗牛
大兵的故事有趣。有的公司的仓库主动性强的, 也会知道。他们会不断追问计划人员或采购人员。--hbenzj
赞同。这些基本概念要清楚才能在管理上有的放矢,做精细化的提升。--hbenzj
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期待后续发文。--tulipbrave
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都知道智能化很重要,但是很多机构都是空喊口号,具体又做了些什么呢?--szhanrui
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Chapter 18

Inventory strategy by A/B/C category

There are too many companies who implemented ERP but the On-time delivery to customer and the inventory turn-over is still not improved as expected when bought ERP application, why?

There are 2 reasons for this failure, one is transactional data accuracy like inventory; another one is master data related like the inventory strategy set up etc., for sire the master data accuracy is also very important to impact the ERP application, but our focus will be on inventory strategy.

We know that there is no anyone who is completely same as the other people in the world,  it means that each of us has our own character which is different from the others.

Same as individuals, materials parts are having different purchase lead time, BOM usage, commonality, demand fluctuation, unit price, scrap & attrition rate etc. etc. , which decide that we need to implement different inventory strategy for different part #.

Here we mainly focus on the discussion of setting up different inventory strategy by categorizing materials into A/B/C.

Chart 18-1 A / B / C category

Roughly 10% part# occupies 70% of the total inventory value, that’s A parts and C parts on the opposite situation 70% part # with 10% total value. B parts are in the middle.

In terms of inventory strategy for different category, we usually focus on below two areas:

  1. OF - order frequency (or order interval )
  2. BS - buffer stock set up

Theoretically, order frequency should be decided by EOQ – economic order quantity, of which the formula is as below:

EOQ = Square Root {( 2 x annual demand x order handling cost ) / (unit price x annual inventory carrying cost)}

For example, for part # A,

-          per forecast the annual demand will be 1,000,000 pieces

-          order handling cost is 80 us$ per order

-          unit price is 20$ per piece

-          annual inventory carrying cost we use 20%

then the EOQ = sqrt (2 x 1,000,000 x 80 / 20 x 20%) = 6,325 pieces

the order frequency for this part should be OF = 1,000,000 / 6,325 = 158 times, which is meaning roughly every 2 days (365 days per year divided by 158 times) there should be PO placed for this part or we can say that 3 times delivery per week.

Same as part # A, if there is part # B, of which the unit price is only 5$ per piece, no change for the others, then the EOQ will be 12,649 pieces and roughly 1 order per week.

Same for part # C, if the unit price is 0.5$, the order frequency will be roughly every 2 weeks.

But Today’s situation is because the forecast / MPS is usually loaded with weekly bucket, and there is no detailed calculation on part # for EOQ, we just place PO triggered by MRP on weekly basis for all parts no matter A, B or C. This is basically,

  1. For A parts, we are creating more inventory because of less order frequency as while reducing the rescheduling opportunities because of bigger ordered quantity per batch;
  2. Too many order handlings for those B / C parts, which is costing us too much on workload as well as headcount like planners, buyers;
  3. For C parts, also we may face shortage because of same strategy as A and B, but we all know that C parts usually have more attrition / scrap than others.

Then in terms of buffer stock strategy, for different A/B/C category, we also need to consider different strategy. As we discussed in chapter 14, buffer stock is different from safety stock, which is mainly used for coping with the demand fluctuation and in terms of master data set up in ERP, usually we just prolong the in-house handling cycle time on purpose from 1 day for instance to 2 or more days to get the buffer stock arrival earlier than normal lead time. For example, for A parts, if we put 1 day as buffer stock,  we may set up 2 days for B parts and C parts with 5 days even more, example shown as chart 18-2.

Chart 18-2 buffer strategy set up

发表于: 2009-06-28 11:52 程晓华 阅读(1513) 评论(0) 收藏 好文推荐

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