Inventory is a list of goods and materials, or those goods and materials themselves, held available in stock by an enterprise. In other word, inventory is stored accumulation of material resources and physically located that are used in a transformation process and/or activited as asset.
Many enterprises spend a lot of time and efforts for developing sales projections and budgets for expenses. Each month these forecasts are compared to actual sales and expenses. If sales are lower, or expenses higher than what was projected, management will usually take corrective action to ensure that the company remains profitable. Unfortunately, few enterprise maintain budgets and projections for what is probably their largest asset, inventory.
An organization's inventory can appear a mixed blessing, since it counts as an asset on the balance sheet, but it also ties up money that could serve for other purposes and requires additional expense for its protection. In addition to the money tied up by acquiring inventory, inventory also brings associated costs for space, for utilities, and for insurance to cover staff to handle and protect it, fire and other disasters, obsolescence, shrinkage (theft and errors), and others. Such holding costs can mount up: between a third and a half of its acquisition value per year.
Some organizations hold larger inventories than their operations require in order to inflate their apparent asset value and their perceived profitability. The hottest buzzword in inventory these days is zero inventory. It’s a cross between absolute zero and the speed of light. Neither is truly attainable in many cases.
Many enterprises have limited funds available to invest in inventory. We cannot stock a lifetime supply of every item. In order to generate the cash necessary to meet expenses earn a profit, we must sell the material we’ve bought or produced. The inventory turnover rate measures how quickly we are moving inventory through our warehouse.
Considering this reality, many enterprises recognize that they need to know how to control and manage their largest asset, inventory.
Inventory can be transformed back into cash through sales. Organization cannot be successful (or perhaps even survive) unless it understands this relationship and its details processes.
Effective Inventory Management helps organizations to meet or exceed customers' expectations of product availability while maximizing the organization's net profits and/or minimizing its inventory and its related costs.
Conventional knowledge is unable to detect whether we should keep too little inventory or too much inventory or maintain just the right amount of inventory. Thus we need to make in-depth analysis of total supply chain process to ascertain optimal inventory. Effective inventory management is inevitable for today competitive business world and only then firms can improve their productivity and profitability through better inventory management.
Please keep in mind, “ It’s easy to turn cash into inventory, but the challenge is to turn inventory into cash”.
Please combat this challenge and learn inventory management and contribute to your organization you work or you own.
Workshop topics to be covered:
Session 1: 09:00 - 10:30
Introduction to program & learning objective
Introduction to inventory
Why inventory keeping is necessary
Types and stages of inventory
Lead time management
Role of inventory organization
Session 2: 10:45 - 13:00
JIT Philosophy and related issues
Inventory Planning and related issues
Method of inventory valuation
Session 3: 14:00 - 15:45
How much to order, EOQ and related issues
Vendor managed inventory
Slow moving inventory
Inventory of inexpensive materials
Session 4: 16:00 - 17:00
Monitoring residual inventory
Cost of carrying inventory
Wrap up of the day