INVENTORY & MATERIALS MANAGEMENT Course Assignment VERSION 17

Transcription

1 INVENTORY & MATERIALS MANAGEMENT Course Assignment VERSION 17

2 COPYRIGHT 1997 BY QMUZIK All rights reserved. The contents, nor any part thereof, nor the format, the configuration or any other aspect thereof may be copied, transformed, reworked, reverse engineered, stored or transmitted, irrespective of the mode or method thereof, or in any other way be dealt with other than only with the express prior written permission of QMuzik..

3 CYCLE COUNTING PERFORM AN ABC ANALYSIS PERFORM AN ABC RECLASSIFICATION PERFORM A COST GENERATION INVENTORY & MATERIALS PERFORM A MRP SELECTIVE RUN PERFORM A PART NUMBER SEARCH PERFORM A SUPPLY AND DEMAND ANALYSIS ADD & LINK STANDARD ITEM SETUP STOCK LOCATIONS AVERAGE COSTING EXERCISE INVENTORY MANAGEMENT REPORTS

4 CYCLE COUNTING (OPTIONAL) Submit a Cycle Count Run Print Report Provide Feedback Cycle Count Report Define Cycle Count Sets Co-ordinator: (Stock Adjustment) Mail Resolve Count (Waiting Approval) Reject Closed for Feedback

5 INTRODUCTION This course addresses the System functions used in managing materials and inventory. The ABC analysis function assists management in deciding which order policies to apply depending on predicted usage value (quantity needed in time horizon * price). Parts, high in predicted usage value (ABC Classification = A), warrant more management effort than low usage value parts (ABC Classification = C). The Cost Generation function is used to calculate the cost of manufactured parts with a product structure. The MRP selective run function assists management in analysing future part requirements and suggests replenishment actions (Production and Purchase Orders). The Supply and Demand function is used to view and analyse all requirements and replenishments actions per part. The Store and Part Stock Location functions are used to setup Stock Locations. The setup and working of average costing is briefly illustrated. OBJECTIVES : You will learn how to: EXERCISE 1 : Perform an ABC Analysis for Procured Parts EXERCISE 2 : Perform a Cost Generation EXERCISE 3 : Perform a MRP Selective Run EXERCISE 4 : Perform a Part Number Search EXERCISE 5 : Perform a Supply Demand Analysis EXERCISE 6 : Create Standard Items and Link Parts. EXERCISE 7 : Cycle Count Set. EXERCISE 8 : Cycle Count Run. EXERCISE 9 : Cycle Count Report. EXERCISE 10 : Setup Stock Locations. EXERCISE 11 : Average Costing Exercise. EXERCISE 12 : Inventory Management Reports. APPENDIX A : Dangerous Goods, Controlled Defence Items and Permits APPENDIX B : Presenter s Notes Revision 17 : 19 July 2005 Page 1

6 IMPORTANT TO KNOW The following security profile functions are needed to use the inventory management course functions. ABC ANALYSIS CYCLE COUNT REPORT CYCLE COUNT RUN CYCLE COUNT SET INVENTORY MANAGEMENT REPORTS LOCATION MASTER MOVEMENTS MRP MRP SELECTIVE RUN NUMBER CONFIGURATION PART LOCATIONS PART MASTER PART MASTER PRICE PART NUMBER SEARCH PART STANDARD ITEM PART STOCK LOCATION RELEASED PURCHASE ORDER GENERATION REPORT INVENTORY EVALUATION REPORT PRODUCTION WIP STANDARD ITEM MASTER STORE STORES FUNCTION SUPPLIER TO STORE SUPPLY AND DEMAND Revision 17 : 19 July 2005 Page 2

7 EXERCISE 1 A. PERFORM AN ABC ANALYSIS FOR PROCURED PARTS Use the ABC Analysis function to perform an ABC analysis. An ABC Analysis is performed to classify your inventory into three classes based on usage value (Quantity Required * Unit Price). The classes are: A High value usage items B Intermediate value usage items C Low usage value items The ABC classes guides the decisions on which order policy apply per part. (Refer Part Master). The ABC Analysis output is used to determine the cut-off values between the different classes. FIGURE 1.1 ABC ANALYSIS An ABC analysis can be performed for a division or product/s within a division. Follow the steps in Figure 1.1. FIGURE 1.2 ABC ANALYSIS OUTPUT The Column Usage value is used to determine where the cut-offs will be between the different classes. Click on the Usage Value to search the result set on Usage Value. Revision 17 : 19 July 2005 Page 3

8 EXERCISE 1 B. PERFORM AN ABC RECLASSIFICATION Use the ABC Analysis function to perform an ABC reclassification. The reclassification is determined by specifying the cut-off values between the different classes. The 80/20 or Pareto rule guides the decision on where the cut off will be. By spending 80% of our management effort on the let say 20 % A class items will be dramatically more effective than spending 80% management effort on C class items. FIGURE 1.3 ABC RECLASSIFICATION Follow the steps in Figure 3.1. To physically update the ABC classification on the part master, click the Update ABC Class checkbox. To automatically update the days supply for the order policy period cover interval on the part master, click the checkbox Update Days Supply FIGURE 1.4 ABC RECLASSIFICATION RESULT Figure 1.4 displays the ABC reclassification results. It will only show it for parts where the classification did change. Revision 17 : 19 July 2005 Page 4

9 EXERCISE 2 PERFORM A COST GENERATION Use the Cost Generation function to perform a cost generation. The Cost Generation function is used to determine the cost of a product, assembly or sub-assembly. It uses all cost elements (Part Operation-Labour, Material Costs, Subcontract Costs etc) of the parts in the manufactured parts product structure. FIGURE 2.1 COST GENERATION Cost generation errors will be displayed on the CostGen Error tab. The cost generation output will be displayed on the CostGen Output tab and is also recorded on your C drive as a.txt file (see Figure 2.2). Follow the steps in Figure 2.1. Step 2 indicates that we are calculating the costs but not updating it. Two fields on the division function will determine if standard prices for the current and next year can be updated via the cost generation function: 1. Curr_Yr_Cost_Updt_Costgen 2. Next_Yr_Cost_Updt_Costgen FIGURE 2.2 COST GENERATION OUTPUT Revision 17 : 19 July 2005 Page 5

10 EXERCISE 3 PERFORM A SELECTIVE MRP RUN Use the MRP function to perform a selective MRP run. The main function is to analyse requirements and suggest replenishment actions. The inputs are Sales Orders, Order Policies and existing replenishment orders. The outputs are new replenishment suggestions (Production Orders and Purchase orders) and suggested changes on existing replenishment orders. The MRP Selective Run can also be used to perform what if analysis. To disable Auto Release of Purchase Orders ensure that the Purchase Orders Order Auto Release Horizon Days is zero. FIGURE 3.1 MRP NOTE: Follow the steps in Figure 3.1. to select the parts for which the MRP run must be done. FIGURE 3.2 MRP Revision 17 : 19 July 2005 Page 6

11 EXERCISE 4 PERFORM A PART NUMBER SEARCH Use the Part Number Search function to perform a part number search. The Part Number Search function is used to search for parts where the part number is not known. Various search options are available. FIGURE 4.1 PART NUMBER SEARCH Follow the steps in Figures 4.1 to 4.3. Step 1 and 2 specifies that we want to see subcontracted production parts only. FIGURE 4.2 PART NUMBER SEARCH Follow the steps in Figures 4.2. to specify search on part numbers starting with BIC. Revision 17 : 19 July 2005 Page 7

12 FIGURE 4.3 PART NUMBER SEARCH Follow the steps in Figures 4.2. to specify additional columns you want to have displayed on the report. FIGURE 4.4 PART NUMBER SEARCH The Search button must be selected before results will display. Revision 17 : 19 July 2005 Page 8

13 EXERCISE 5 PERFORM A SUPPLY AND DEMAND ANALYSIS Use the Supply And Demand function to perform a supply and demand analysis. The Supply and Demand function is used to analyse stock availability, requirements and replenishments for a specific part. FIGURE 5.1 SUPPLY AND DEMAND NOTE: Various setting options are available and should be selected according to the information you require. FIGURE 5.2 SUPPLY AND DEMAND DETAIL Step 2: Click on any order line to view more order details on the detail tab. Step 1: Click to see a graphical representation of the expected inventory flow on the selected item. TIP: The projected available quantity displayed in the quantity available column will be green, yellow or red. Green indicates that the projected quantity available is > 0 and > the safety stock quantity. Yellow indicates that the projected quantity available is > 0 but < the safety stock quantity. Red indicates that the projected quantity available < 0 and therefore a potential stock shortage. Revision 17 : 19 July 2005 Page 9

14 FIGURE 5.3 SUPPLY AND DEMAND GRAPH Double-click anywhere on the column. The system will now default back to the detail tab and highlight the exact requirement/ replenishment order responsible for the planned available stock. Click anywhere and hold it down to view the amount available for that column. Click with your right mouse button to open the Chart Edit menu. Revision 17 : 19 July 2005 Page 10

15 EXERCISE 6 CREATE STANDARD ITEMS AND LINK PARTS Use the Standard item Master function to create a Standard Item. Standard Items are used to allow cross-referencing of parts that are essentially the same but have different part numbers. It can assists in identifying whether excess stock exist for a different parts belonging to the same standard item number prior to executing an MRP suggested order. FIGURE 6.1 STANDARD ITEM MASTER Follow the steps in fig 6.1 to add the Standard item Master. FIGURE 6.2 PART STANDARD ITEM Use the Part Standard Item function to link parts to the standard item. Follow the steps in fig 6.2 to link parts. Revision 17 : 19 July 2005 Page 11

16 FIGURE 6.3 CROSS REFERENCE Using the Part number to display the Standard Item Number. Revision 17 : 19 July 2005 Page 12

17 EXERCISE 7 CYCLE COUNTING SET Cycle Counting is done to determine the accuracy of Inventory and to correct discrepancies. Qmuzik assist in the following ways: Cycle Count parameters may be defined in a Cycle Count Set. These Parameters are used to determine the Inventory records that must be counted during the Cycle Count. The Cycle Count Run uses the Cycle Count Set to produce a list of inventory records to be counted. During the Cycle Count Run the system takes a snapshot of the Cycle Count Set and saves it for audit purposes. The Report Back on the Physical Cycle Counting can be done using the Cycle Count Report function. Follow the steps in Figure 7.1 to 7.3 to define a Cycle Count Set. FIGURE 7.1 BASE SETTINGS FIGURE 7.2 INCLUDE/EXCLUDE FIGURE 7.3 ADDITIONAL SETTINGS Revision 17 : 19 July 2005 Page 13

18 EXERCISE 8 CYCLE COUNT RUN A Cycle Count run produces the inventory records that are to be counted. Certain parameters can be set per Cycle Count Run. When submitted the Cycle Count Run produces a Cycle Count list. Study the online help before doing the exercise. Follow the steps in Figure 8.1 to 8.3 to define a Cycle Count Run and submit the Cycle Count Run. FIGURE 8.1 DEFINE THE RUN FIGURE 8.2 SUBMIT THE RUN FIGURE 8.3 VIEW THE PARAMETERS USED Revision 17 : 19 July 2005 Page 14

19 STATUS RULES If the status is Created C, this field is disabled. The status is changed from Created C to Submitted S when the Cycle Count Run is submitted. If the status is Submitted S, the status can only be changed to Opened for Feedback O If the status is Opened for Feedback O, the status can only be changed to Closed for Feedback D. If the status is Closed for Feedback D, the status can be changed back to Opened for Feedback O, Resolved R or Unresolved U. If the status is Resolved R, the status can be changed to Unresolved U. If the status is Unresolved U, the status can be changed to Resolved R and Opened For Feedback O. When the status is set to Opened For Feedback O, the user can begin to capture the actual quantities on hand using the Cycle Count Report function. Once it is Closed For Feedback D, the users cannot report actual counts anymore. The status may still be changed though. The status can only be set to Resolved R if all the counts (Cycle Count Report records) have a status of either No Deviation, Rejected or Mailed. If, however, you want to close the run while there are still unresolved counts, set the status to Closed Unresolved. Revision 17 : 19 July 2005 Page 15

20 EXERCISE 9 CYCLE COUNT REPORT This function is used to report back cycle count results against the list of inventory records to be counted. The cycle count list is produced during the Cycle Count Run. Follow the steps in Figure 9.1 to 9.3 to perform a Cycle Count Report and view the Results. FIGURE 9.1 SETTINGS Only parts that exist in this Cycle Count Run s list will be available for selection. It is populated with the part number and part description from the Part Master and Cycle Count List tables for the selected Run ID where the part number exists on both tables. FIGURE 9.2 REPORT Changes can be made depending on the status of the cycle count record. (Step 10) Only No Deviation count status may be deleted since all other counts must be resolved or rejected first. FIGURE 9.3 CAPTURE COUNTED QUANTITY ON HAND Revision 17 : 19 July 2005 Page 16

21 EXERCISE 10 SETUP STOCK LOCATIONS This function is used to create locations in stores that can serve as default positions or lacations for specific parts. Follow the steps in Figure 10.1 to 10.3 to create a default location for a specific part. FIGURE 10.1 LOCATION FORMAT Enter the format as shown in step 3. FIGURE 10.2 DEFAULT LOCATION Enter the default Stock Location as in figure It is only a default and not a compulsary location. The Location Maximum field is mandatory. Revision 17 : 19 July 2005 Page 17

22 EXERCISE 11 AVERAGE COSTING EXERCISE This exercise is used to illustrate the average costing setup and effect. FIGURE 11.1 SYSTEM SETTING Step 1: The System Configuration function is used to set the costing model for the company. FIGURE 11.2 AVERAGE COSTING CALCULATION Step 1: The Store function is used to define how the average costing is calculated per store. Revision 17 : 19 July 2005 Page 18

23 FIGURE 11.3 PRICE AND DISPLAY OPTION Step 1 & 2 shows the expected cost per unit. FIGURE 11.4 PURCHASE ORDER 1 Step 1 shows the part number being ordered Step 4 shows the quantity ordered of 5. Step 3 shows the Unit price of 0.38 currency units. FIGURE 11.5 PURCHASE ORDER 2 Step 1 shows the new average cost upon receipt of components ordered in fig 11.4 Revision 17 : 19 July 2005 Page 19

24 EXERCISE 12 INVENTORY MANAGEMENT REPORTS The following Inventory Mnagement reports exists as standard reports within the system. Use the Inventory Management Reports function. FIGURE 12.1 REPORTS NOTE: NOTE: FIGURE 12.2 REPORTS Select the Division and accounts you want included in the report. FIGURE 12.3 REPORTS NOTE: Report output will be displayed in Microsoft Excel Revision 17 : 19 July 2005 Page 20

25 LESSON SUMMARY On completion of the Inventory Management course, students will be able to do ABC analysis, MRP runs, cost generation for manufactured parts, part number search, supply and demand analysis, create Standard Item Numbers, perform Cycle Counting, setup stock locations and setup average costing. TO Perform an ABC Analysis. Perform a Cost Generation. Perform a MRP Run. Search for a Part Number. Analyse Supply and Demand for a Part. Create a Standard Item Number Link Parts to Standard Items Set the Cycle Count Run the Cycle Count Report back on actual Cycle Count results Setup Stock Location format Setup Default Stock Locations Average Costing Exercise Inventory Reports DO THIS Use the ABC ANALYSIS function. Use the COST GENERATION function. Use the MRP SELECTIVE RUN function. Use the PART NUMBER SEARCH function. Use the SUPPLY DEMAND function. Use the STANDARD ITEM MASTER function. Use the PART STANDARD ITEM function. Use the CYCLE COUNT SET function. Use the CYCLE COUNT RUN function. Use the CYCLE COUNT REPORT function. Use the STORE function Use the PART STOCK LOCATION function Use the SYSTEM CONFIGURATION, STORE and PART MASTER functions Use the INVENTORY MANAGEMENT REPORTS function. Revision 17 : 19 July 2005 Page 21

26 APPENDIX A DANGEROUS GOODS, CONTROLLED DEFENCE ITEMS AND PERMITS FIGURE 1 STORE A Store classified as a Magazine is used to store dangerous goods. Only dangerous goods which have predefined locations as defined on the Part Stock Location function can be stored in a Magazine. FIGURE 2 STORE DANGEROUS GOODS LICENSES This function is used to record and manage the life cycle of storage licenses for stores where hazardous items can be kept. Before submission for approval can commence, the details of the hazard classes and volumes to be stored must be identified via the tab provided. When hazardous goods is received the system will check for storage compatibility, and the validity of the store license and its limitations in terms of hazard classes and max volumes. Where mixed storage takes places, the severity ranking of hazard classes will also be validated. Revision 17 : 19 July 2005 Page 22

27 FIGURE 3 STORE DANGEROUS GOODS LICENSES See notes on figure 2 FIGURE 4 DANGEROUS GOODS REGULATION The tabs for UN ID numbers and Hazard classification show parts where the part inherits the hazard class from its Commodity code. A hazard division code carries a severity ranking which is mandatory. It is applied where mixed storage of hazardous goods takes place and where severity ranking, in association with storage licenses govern the maximum quantities that can be stored in a specific store/magazine. The storage license UOM is also specified via this function per hazard division code. FIGURE 5 DANGEROUS GOODS REGULATION See notes in figure 4 Revision 17 : 19 July 2005 Page 23

28 FIGURE 6 DANGEROUS GOODS REGULATION See notes in figure 4. FIGURE 7 PERMIT TYPES This function is used to define and maintain all relevant permit types applicable to your business. It is most applicable to business relating to the manufacturing of explosives and other dangerous goods, as well as business in the aerospace and defense industry. If regulations in local- and foreign trade and transportation of hazardous goods or controlled defense items require permits for such transactions, this function will serve the purpose to define the required permit types. FIGURE 8 PERMIT TYPES See notes in figure 7. Revision 17 : 19 July 2005 Page 24

29 FIGURE 9 PERMIT TYPES See notes in figure 7 FIGURE 10 PART MASTER Indicate if a part is classified as a controlled defence item and or dangerous goods regulation item. The Storage compatibility class field is mandatory for Dangerous goods regulation items. This allocates a compatibility class to an item for the purpose of mixed storage and its compatibility with other classes of hazardous goods. FIGURE 11 PART MASTER If a dangerous goods regulation item specify a store classified as a Magazine as the controlling store. Revision 17 : 19 July 2005 Page 25

30 FIGURE 12 PART PERMIT TYPES This function associates 1 or more permit types with a specific part number. Only parts that have been identified as being either a Controlled defense item, or a Dangerous goods item with a hazard classification, will allow permit types to be associated with them. FIGURE 13 PERMIT MASTER This function is applied to record and manage the life cycle of a permit. Where permits relate to controlled defense items or dangerous goods, the function requires that the detail of the associated orders and quantities for an intended local-or export sales shipment, or for local- or imported purchasing, be linked to the permit before submission for approval can commence. Business process such as purchase order receipts and shipping to customers, will, for all lines with part numbers that have predefined part permit types, validate if all required permit types are in order. If so, the transaction will be allowed. If not, the system will either issue a warning or will stop the actual transaction from taking place. Warnings are issued when all required permits are detected, but where 1 or more permits are not yet approved. Stops are enforced when no evidence exists for the required permits. Revision 17 : 19 July 2005 Page 26

31 FIGURE 14 PERMIT MASTER See notes in figure 13 Revision 17 : 19 July 2005 Page 27

32 APPENDIX B PRESENTER S NOTES EXERCISE 1 Supply the students with the product definitions to be used. analysis/reclassification and order policies. Discuss the relationship between ABC EXERCISE 2 Note that the cost generation function can be performed only for a parent with at least one child. The part will not populate in the list box if there is no structure. GENERAL Ensure that enough data exists to perform the exercises. STANDARD ITEMS If the substitute parts must be demonstrated during the lesson, a Sales Order with a Fix-Account Part must be created. Make sure that you use a part with parts that are linked to a Standard Item Number via the Part Standard Item function. Revision 17 : 19 July 2005 Page 28