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Binghamton University 4/27/2010 Inventory Control Binghamton University 4/27/2010 Inventory Control

Background Matt Lazeski Binghamton University Graduating Class of 2008 Industrial Systems Engineering PB Industries Background Matt Lazeski Binghamton University Graduating Class of 2008 Industrial Systems Engineering PB Industries Vestal, NY Contract Sheet Metal Fabricator Industrial Engineer: Production Planning/Scheduling Process and Product improvement, both manufacturing process and business system processes.

My manufacturing background… Been in sheet metal fabrication for about 8 years now Started: My manufacturing background… Been in sheet metal fabrication for about 8 years now Started: Stamped Fittings Incorporated Interned: Interned for Daimler Chrysler Commercial Bus Interned at PB Industries Full Time Employment: PB Industries

Inventory Control and Lean Manufacturing What lean manufacturing is at PB Industries: Systematically removing Inventory Control and Lean Manufacturing What lean manufacturing is at PB Industries: Systematically removing the seven forms of waste from the business to better serve the customer. What is waste? Waste is anything in your business or manufacturing processes that does not directly add value to the customers product.

What does this have to do with inventory control? !? First, what different inventories What does this have to do with inventory control? !? First, what different inventories do manufacturing operations typically have? Raw Materials, Work In Process (WIP), Finished Goods, Consumables Second, The customer is buying the product, they are not directly buying raw materials, WIP, finished goods, or consumables.

To better serve the customer… Does the customer care; How much raw material you To better serve the customer… Does the customer care; How much raw material you hold? How many parts you build at one time? How much of their finished product you hold at any one time? What your material lead times are? NO! They want their product, however much and whenever they want at A FAIR PRICE.

Inventory is Money It costs to hold it, it costs to make too much Inventory is Money It costs to hold it, it costs to make too much of it. Inventory = Money Too much Inventory = Wasted Money (However yes some inventory is needed to operate at an acceptable level for the customer, minimizing that inventory is how you can better serve the customer)

Inventory Control Schemes and Inventory Accuracy Inventory Control Schemes develop a means to find Inventory Control Schemes and Inventory Accuracy Inventory Control Schemes develop a means to find that line between to much inventory and not enough to operate at an acceptable level. Inventory Accuracy is often more important because you can set up all of these inventory controls but if its not accurate in the end, what's the point?

Why does inventory have to be accurate? Accounting Purpose Inventory Turns Income Statement Material Why does inventory have to be accurate? Accounting Purpose Inventory Turns Income Statement Material Requirements Planning Requirements for upcoming work In the end it effects your ability to serve the customer.

How to ensure inventory accuracy? Assumption 1: Nobody can count Assumption 2: Memory is How to ensure inventory accuracy? Assumption 1: Nobody can count Assumption 2: Memory is not a reliable inventory system You need to build inventory accuracy into the system. Through Audit (Cycle counting) Structured Inventory Control Procedures

Inventory Control Schemes Just don’t build it or buy it if you don’t need Inventory Control Schemes Just don’t build it or buy it if you don’t need it! ‘Super Market’ Concept Kanbans and Two Bin Systems Electronic Signal Systems

Questions? Contact Information: mlazeski@pb-industries. com Questions? Contact Information: [email protected] com