Inventory control and planning are most important to organizations. They assist them to determine the accuracy of data, and allow them to know their storage, product distributions, forecasting meeting customer’s needs and wants. If an organization operates without using the right way techniques for its inventory management, it might be having a high risk of shortages, overstocking, damages, or obsolete stocks. With good planning techniques and inventory control, companies can manage their inventory strategically. Concurrently, they can avoid wastages, improve productivity and predictability while achieving their business goals.
Just-In-Time (JIT) inventory
Just-In-Time (JIT) inventory system is the management strategy that increases efficiency and productivity in manufacturing workflow. It targeted to reduce flow times and costs to the distribution of materials. Otherwise known as Kanban Scheduling for (JIT), it is a scheduling system used in lean manufacturing. The developer is an engineer from Toyota, named Taiichi Ohno, who developed this system which helps to improve manufacturing efficiency and streamline their processes.
The Just-In-Time inventory management strategies help manufacturers to hold sufficient inventory to absorb the maximum volume in market demand. At the same time, it also helps them to minimize costs in their purchase of raw materials. They can store sufficient resources to manufacture without holding excess materials. The JIT production concept develops production consistently with high-quality Workmanship and reliable suppliers without machine breakdowns.
ABC Inventory Analysis
ABC is a stock management technique that is primarily based on placing merchandise into classes in order of importance. There are lots of inventories in a warehouse and it is not possible to deal with all objects at the same. The Pareto precept is used to classify the items into three core categories. It is primarily based on the 80/20 rule, the regulation of the crucial few, which states that 20% of the items take up 80% of the value to identify the huge opportunities to fulfil the company’s sales order.