Hello, Welcome to the Inventory Management System Fundamental video. Today we are going to look at inventory and item management. what we are going to focus on today is item master data, any company has inventory. you can go and look into your inventory master data, whether you are using spreadsheet to control or you already have an existing system, you must have all this fundamental to make all your structure correct before proceeding to other area. this is very important for most business owners, warehouse users. because if you don’t understand the fundamental, your management will hit a lot of problem getting out your inventory data in the future.
make the 1st step right is always the key when you get your inventory setup started. so that you can streamline the stock item process and you do not hit the problem in the future.
just like when you are building a strong foundation for your house, from materials to use and what to avoid.
let’s take a look at what you should have in the item master now.
first, you should have all the item numbers ready. Some call it a SKU number. you should have all these numbers setup for your inventory.
a lot of users are not able to define how to design their item numbers. so at the end of the implementation, they hit problem and then getting mess up with their item code again and again.
Does this sound familiar to you too?
Next. Does your inventory system be able to generate barcode? So that your warehouse user will be able to scan the item using the mobile device to reduce human error.
There are many other criteria, i will be sharing what you need to look at with your item master here, because this master is going to drive pricing info, inventory info, vendor info, purchasing info, and planning information, whatever it could be happen in your operation. Inventory is the first priority you should get it up and get it right first.
In the item master, you should also have unit price info, for e.g your item base price, list price, min price, or quantity discount price for a specific item in your system.
Besides the pricing information, there will also have the costing information, it will capture your inventory average cost, last cost landed cost, as well as your inventory standard cost. A lot of users are having a problem and not able to define the standard cost for their stock item, so often time they hit problem in inventory valuation during stock audit, or not able to product manufactured good costing. we can discuss this costing issue in detail in my next video.
alright, other than this, you should also have information like length, width, height, the unit of measure for your item master, you can drill down to your item data to check how often you have been ordered this item, it is really a nice way of looking at your item if you have all this data properly control at one place. right?
besides, you could also category the item as a sales item, so that it is available in your sales order, or you can categorize it as a purchased item, if you purchase it, what if
you produce it, you may need to understand what is the production approach? whether it should be a Make to order item or a make to stock item?
when comes to inventory data, it is important to set the base unit measure and also multi-unit of measurement. how’s your item has been performing base on the different unit measurements.
other than this, your item master should also handle multiple warehouses. and so you can see what is in stock, what is out stock, what is committed from sales, what is pending from the purchase order, what has been allocated to Job, and by end of the day, what is available in each of your warehouses.
if you are a manufacturer, under your planning data, you have to know whether you are going to buy this item or produce this item, and also it will be available for you under your MRP generation, so when you are running your MRP report, you can look at what’s are the item is actually required to replenish to meet your demand. it can be the purchase lot size, the ordering lead time for your MRP planning. so if you are producing this item, you may already have all this production data in your system.
so. let’s go and take a look at what is going on with your inventory after this.
that’s all for today. thank you very much for listening to me on this quick overview of the inventory master data.
take a look at what you have now, what is missing from your inventory setup and control.
This video is to assist your company get the foundation right, then we will go into other areas to address your daily operational challenges.