ERP software system processes, ERP processes in INVENTORY CONTROL (Stock Management) module.

ERP Business Processes Contained in the INVENTORY CONTROL (Stock Management) ERP Software Module
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To view the business processes supported under a different ERP software system module view the ERP Software Modules page and click the link to the appropriate module. The ERP business processes listed on this page pertain to INVENTORY CONTROL (Stock Management).

ERP software systems comprise a variety of software modules, each of these ERP modules houses a set of business processes that the particular ERP software package supports. A useful starting point for compiling an ERP software system spec / RFQ / RFI / ITT is listing the required system functionality, or business processes, that an ERP software system would need to support in order to be considered as viable for ERP system selection and implementation. The list of ERP business process listed below relates to the INVENTORY CONTROL (Stock Management) module of ERP software packages. View the high level ERP Software Modules page to see a list of other ERP system modules that encompass the various business processes required of a modern integrated ERP software package.

The standard ERP system business processes for INVENTORY CONTROL (Stock Management) are tabulated later on this page - the ERP business processes are descibed in more detail than on the ERP System Processes page. Next to each description of the ERP processes for INVENTORY CONTROL (Stock Management) here are the explanations as to why each particular business prcess may be important / relevant.

Central to any ERP software package is the INVENTORY CONTROL (Stock Management) software module - it is the cornerstone of an effective and integrated ERP software package. The below list of business processes can be used as first pass list of ERP software system functional requirements for your business in the area of INVENTORY CONTROL (Stock Management) that can be utilised to arrive at a broad brush ERP system spec of required functionality to assist your ERP selection process and subsequent implementation.

INVENTORY CONTROL (Stock Management) ERP Business Processes
ERP Business Process
ERP Process Explanation
Use backflushing to determine material usage.  May be carried out for parts for which detailed monitoring is not carried out; usage is calculated from the number of finished goods produced and the scrap levels. Counts are usually made (within the flow of repetitive manufacturing) and used to relieve WIP inventory by post-deduction. 
Communicate potential supply delays to the shop floor.  Carried out to highlight when low stock levels may cause production problems; instructions to reschedule work and / or reload work centres may become necessary. 
Control of final dispatch of products to customers.  Inform customers of exact shipping details etc. 
Control stock usage in accordance with first-in-first-out / shelf life methods.  Carried out to reduce deterioration of stock, obsolescence of stock and out of date stock (a form of shelf life control). 
Control warehousing operations.   
Monitor frequency / costs of stockouts.  Stockouts provide alarms (which generate exception reports etc.). The frequency at which stockouts occur should be monitored and the appropriate purchasing lead times / safety stock levels etc. should be adjusted if the frequency is consistently too high or too low. (The stockout costs can be measured and compared with the storage costs of the item). 
Perform Pareto analysis (ABC analysis) to identify items which need more careful control.  Carried out to classify items by annual value volume (price multiplied by projected volume) in order to identify those which need very careful planning. They are usually grouped into three classes (A, B and C items) where A items are the most critical (Pareto analysis says that such parts often constitute 20% of the total parts but represent 80% of the value). 
Identify surplus and obsolete items.  Carried out as an indication of poor planning (feedback) or poor stock control. 
Generate instructions for finished goods storage.  Carried out to ensure that finished goods which are not allocated to orders or are finished early are stored correctly. 
Generate ROP, 2-Bin, Kanban style inventory replenishment requests (having established appropriate levels of safety stock).  Carried out to control appropriate inventory items. These control methods are simpler and cheaper to operate than MRP methods of control. 
Monitor and record stock movements.  Carried out to keep records of where stock is and where it has been. 
Monitor, record and control part finished goods / sub assemblies etc.  Carried out to keep records on quantities and positions of sub assemblies and intermediate components throughout production. 
Determine and monitor slow moving inventory items.  Carried out to check for obsolescence of an item. 
Monitor and co-ordinate stock on multiple locations.   
Monitor the rate of turnover of raw materials, components and finished goods.  Gives an indication of the appropriateness of the size of the order quantities for inventory items. This check can also highlight obsolete items. 
Perform adjustments to inventory records (i.e. after stocktakes, breakages etc.).  For instance, to update goods records due to stock takes, obsolete stock, breakages, loss and so on. 
Process inventory transfers between different locations.   
Process planned / miscellaneous issues and receipts.  Carried out to monitor and check issues and receipts to and from stores which are either planned or unplanned. 
Produce picking lists for kitting purposes.  Carried out for assembly style operations which use kits of parts which need to be gathered before assembly can start. 
Monitor and control safety stock sizes for inventory items.  Carried out to check the appropriateness of existing safety stock levels (may also use stock turn, stock out etc. information). 
Monitor performance of the stock control functions.  Carried out by measuring loss, breakages, quality, parts not available etc. 

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The 4engineer to order manufacturer manufacturing production planning project management ERP system EDM PDMETO web site is being used to fulfil three purposes, firstly, it is a vehicle to recruit engineer to order manufacturers to take part in the research project concerned with improving how ETO manufacturing companies plan production and manage their jobs / projects. Secondly, the 4engineer to order manufacturer manufacturing production planning project management ERP system EDM PDMETO web site is being used a means of disseminating the results of the research project as well as good practices employed by successful engineer-to-order manufacturers. Thirdly, the 4engineer to order manufacturer manufacturing production planning project management ERP system EDM PDMETO site will be developed into a portal site for ETO manufacturers.

 

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Please contact Austen Jones with any questions, comments or suggestions.

Last Updated: 27-Mar-2008