| INVENTORY TRACKING:
Any manufacturing based company faces problems of inventory. Inventory is primarily is
three stages - raw material, work-in-progress (WIP) and finished goods. Common inventory problems faced by
the company are,
- Inability to determine when or how much material
to order
- Inability to schedule orders
- Overstated open orders
- Inability to differentiate between usable and
unusable inventory
- Lack of visibility into on-hand inventory
- Late shipments from vendors
- Inability to execute the MRP
- Inability to identify material substitutes
- Incomplete bills of materials
- Long internal lead times
- Lack of timely, accurate information
- Inability to de-expedite and cancel orders
- Excessive obsolete inventory.
- Inability to prevent obsolete parts from being
used on bills of materials
- Excessive expired inventory
- Inability to identify slow-moving inventory
Overall the problem is compounded
due to the lack of visibility and accuracy of inventory holding data.
In fact, the annual cost of just
WIP inventory can be as high as 30%. Solution can be found by simultaneous implementation
of MRP II or ERP software along with bar-coding of all material in the manufacturing
process.
Significance of
bar-coding in WIP tracking: Each work center can have a bar code reader that a
worker uses to capture important data of the products or assemblies that pass through. As
the worker completes a manufacturing operation, the bar code reader is used to enter the
work order, the operation code, the employee ID and quantity worked upon.
The data gets uploaded to a
transaction system and gives upto the minute update to the material requirement planner.
This is extremely important to
pin-point bottle-necks in the manufacturing process. This tracking helps planners to
decide on the alternate routing in line with the existing capacities of the plant. |
