Inventory Control

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Inventory ControlSeven wastes in Lean

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Seven wastes in Lean

• They are also called seven deadly wastes of
  manufacturing.
• They are identified and grouped as activities
  with no value.
• Their processes occur during manufacturing and
  limit profitability.
• They are also termed as overproduction .
• Occurs when a manufacturer creates more goods
  than it can sell.

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Definition and Explanation of Bottleneck Machine

• A bottleneck is an explained situation.
• It is where efficient system performance is
  prevented by a single or maximum number of
  resources and machinery.
• It is an overcrowding part of the system where
  the chain process is slowed down.
• Firms have to enhance its bottleneck first in
  order to increase performance.

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Illustration of a bottleneck

• An increase in the width of existing point
  increase outflow.
• These limiting factors in machinery and
  processing are the bottleneck point.
• Mechanisms of bottlenecks such as data processing
  software influence the system designers
  prevention of bottleneck situations
• This limit performance or capacity by offering a
  crucial part or increasing high throughput.
• An approach that lowers inventory costs and
  improves services to customers is reducing the
  replenishment lead times

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• Reducing lead times is an ideal strategy of
  reducing inventory costs .
• It also enhances client relationship.
• This helps when considering raw material lead
  time.
• It also involves the time connecting external
  parties who are the clients.
• This lead time is broken into reviewing time,
  time spent on manufacturing and transportation
  for it to be effective.
• The need is identified at review time and an
  order is also raised.

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Costs related to Keeping Inventory

• Inventory costs are classified as ordering,
  holding and stock-out costs.
• Ordering costs entail activities involved when
  placing an order.
• It can also be calculated by evaluating Economic
  Order Quantity.
• EOQ EOQ v (2ACP/CH), AAnnual demand,
  CPReplacing cost per order, CHunit holding cost
  per year.
• Holding costs included costs incurred in stock
  keeping.
• Shortage costs accrue based on lack or
  insufficient stock safety.

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