Any advanced manufacturing system relies on an accurate inventory to drive job and PO planning. Without an accurate inventory you are plagued with chronic shortages, over-stocking, high expediting costs, late shipments, and an erosion of user confidence in the manufacturing system and customer confidence in you as a supplier.
Users lose confidence and resort to manual processes
Without an accurate inventory users lose confidence in the manufacturing system and resort to inefficient manual processes.
•Because MRP cannot function without an accurate inventory, jobs and POs are created manually, which is inherently biased towards over-stocking and typically results in shortages due to time-phasing issues.
•Chronic shortages encourage material hoarding as a means for getting jobs started, which helps individual jobs at the expense of other jobs and overall shop efficiency.
Chronic inventory problems inflict high costs
Chronic inventory problems inflict high costs and negatively impact cash flow and return on investment.
•Unexpected shortages incur high expediting costs due to express shipping charges and higher unit prices.
•Material shortages delay jobs and shipments, which in turn delays customer payment cycles and negatively impacts cash flow.
•Over-stocking needlessly ties up working capital and reduces return on investment.
Inventory problems are a cancer that affects employees and customers
Chronic inventory problems are a cancer that negatively affects employees and customers. Employees develop a cynical attitude towards the manufacturing system and regard it as more of a hindrance than a help. Lengthy lead times and frequent delays cause customers to lose confidence in your reliability as a supplier.
The DBA process workflow facilitates inventory accuracy
The DBA process workflow facilitates inventory accuracy.
•Items are stored in specific inventory locations, which facilitates receiving, issuing, picking, counting, and transferring transactions and reduces errors.
•Materials are issued to jobs in real time when they are used rather than after-the-fact when jobs are finished. This aligns on hand quantities with actual stock quantities.
•Stock counts are easy to perform, which facilitates cycle counting for bulk raw materials such as plastics are difficult to track at job level and have usage quantities that vary from job to job.
•DBA includes sales orders so that all inventory transactions, including order picking, are performed within a single system with consistent processes.
Accurate inventory enables MRP and job release
An accurate, real time inventory enables jobs and POs to be generated by MRP, which eliminates the over-stocking and time-phased shortages that are inherent to manual planning. MRP generates a coordinated master schedule where jobs are released to production and rescheduled based on material availability.
