pgbm03 mba operation management session 07 inventory and material management
TRANSCRIPT
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.1
12.1
PGBM03 Operations Management
Session 07Inventory and Material
Management
Module Leader: Peter Coleman
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.2
12.2
Design
Planning and
control
Operations
strategy
Improvement
Inventory planning and control
Inventory planning
and control
The operation supplies…the delivery of a quantity of
products and services when required
The market requires…a quantity of products
and services at a particular time
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.3
12.3
Key operations questions
• What is inventory?
• Why is inventory necessary?
• What are the disadvantages of holding inventory?
• How much inventory should an operation hold?
• When should an operation replenish its inventory?
• How can inventory be controlled?
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.4
12.4 Inventory is created to compensate for the differences intiming between supply and demand
Input
process
Inventory
Output
process
Rate of supply from input process
Rate of demand from output processInventory
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.5
12.5
e.g. Automotive parts
distributor
e.g. Local retail store
Single-stage
inventory system
Suppliers Suppliers
Stock Sales operation
Central depot
Distribution Local distribution
point
Sales operation
Two-stage inventory
system
Single-stage and two-stage inventory systems
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.6
12.6
e.g. Television manufacturer
Suppliers
Input
stock
Stage 1
A multi-stage inventory system
WIP Stage 2
WIP Stage 3
Finished goods stock
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.7
12.7
A multi-echelon inventory system
Yarn producers
Cloth manufacturers
Garment manufacturers
Regional warehouses
Retail stores
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.8
12.8 A paper merchant must get its inventory planning and
control right
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.9
12.9
Disadvantages of Inventory/Stock
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.10
12.10
Holding (Carrying) Costs
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.11
12.11
Ordering Costs
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.12
12.12
Total Costs of Ordering Paln
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.13
12.13
Economic Order Quantity
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.14
12.14
Economic Order Quantity Calculations
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.15
12.15
Material Requirements Planning (MRP)
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.16
12.16
Material Requirements Planning (MRP)
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.17
12.17
Requirements for MRP
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.18
12.18
MRP System Modules
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.19
12.19
MRP Calculation Algorithm
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.20
12.20
MRP Calculation Algorithm (Example)
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.21
12.21
MRP Calculation Algorithm (Example)
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.22
12.22
Assessment of MRP
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.23
12.23
Assessment of MRP
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 201012.24
12.24
MRP1, MRPII, ERP and Beyond…