Description
The PPT explains about selective control means selecting the area of control so that required objective is achieved as early as possible without any lost of time due to taking care of full area. The PPT also talks about classification of inventories in detail.
Selective Inventory Control Techniques
Agenda
• Selective Control • Types of classifications • Brief about classifications • Case study – ABC and VED system • Conclusion
Selective control
• Differential control for different items • Criteria – Cost – Criticality – Consumption – Lead time – Procurement difficulties
• 8 major types of classification
Inventory classifications
• ABC –Pareto’s principle –Annual consumption value –Eg. Automobile industry
• HML (High, Medium, Low) –Unit price of material –To control stock
Inventory classifications
• FSN (Fast, Slow, Non moving)
– Dynamics of consumption pattern – Control obsolescence – Eg. Departmental store
• SDE (Scarce, Difficult, Easy)
– Procurement problem – E.g. scarce – uranium – difficult - spare parts for sophisticated machines
Inventory classifications
• GOLF
– Government, Ordinary, Local, Foreign sources – Source of supply
• SOS
– Seasonal, Off seasonal – Nature of supply – E.g. seasonal: leeche fruits,food grains – Non seasonal: plastics, metals etc.
Inventory classifications
• XYZ
–Value of item in storage –Monitor excess inventory – E.g. bulbs – X bulb fixtures - Z
• VED (Vital, Essential, Desirable)
– Criticality of the item – E.g. hospital supplies
ABC – VED …….. Medical Store
• Case of AFMS (Armed Force Medical Services) • Why Inventory Management ??
? Drugs contribute 60% of the total Budget. ? Effective Inventory management – 20% savings
• Among All ABC –VED is Most suitable.
Case Study
• 190 bedded service hospital • Inventory control ? ABC – Unit Cost * Annual Consumption ? VED – Panel of 10 medical personnel ? Combination of ABC and VED ? Category I, II, III
ABC Classification
Classification Value Of Items (Rs.) % of Total Value No. Of Items % of Total Items A 3866452 70% 47 14% B 1104701 20% 73 22% C 552350 10% 205 63%
VED classification
Classification Number Of Items % Of Total Items
(Approx.)
Vital
Essential Desirable
24
160 141
7%
49.5% 43.5%
ABC – VED Matrix
Classification A B C
Vital
4
2
1
Essential
7
5
3
Desirable
9
8
6
ABC – VED Matrix
Classification A B C Total
Vital
Essential Desirable Total
3
34 10 47
2
38 33 73
19
88 98 205
24
160 141 325
ABC-VED Categories
Category I Top Management AV + BV + CV + AE + AD 3 + 2 + 19 + 34 + 10 = 68 (21%)
Category II BE + CE + BD 38 + 88 + 33 = 159 (49%)
Category III CD = 98 (30%)
Middle level Management
Lower level
Conclusion
1) The management of Category I drugs would help in keeping a check on the annual budget and their availability
2) Effort To bring down number of Items in AD Class. > Savings > No Compromise in the quality of services
References
• ABC and VED Analysis in Medical Stores Inventory Control – Lt. Col. R. Gupta et al • Managing Inventory by Multiple Classification of Items – by Harwinder Singh • http://www.managementparadise.com • http://www.ascconline.com/sol_inventory.htm •http://www.citeman.com/1192-inventoryclassification/ •http://knowscm.blogspot.com/2008/03/inventoryanalysis.html
Thank You
doc_676126796.pptx
The PPT explains about selective control means selecting the area of control so that required objective is achieved as early as possible without any lost of time due to taking care of full area. The PPT also talks about classification of inventories in detail.
Selective Inventory Control Techniques
Agenda
• Selective Control • Types of classifications • Brief about classifications • Case study – ABC and VED system • Conclusion
Selective control
• Differential control for different items • Criteria – Cost – Criticality – Consumption – Lead time – Procurement difficulties
• 8 major types of classification
Inventory classifications
• ABC –Pareto’s principle –Annual consumption value –Eg. Automobile industry
• HML (High, Medium, Low) –Unit price of material –To control stock
Inventory classifications
• FSN (Fast, Slow, Non moving)
– Dynamics of consumption pattern – Control obsolescence – Eg. Departmental store
• SDE (Scarce, Difficult, Easy)
– Procurement problem – E.g. scarce – uranium – difficult - spare parts for sophisticated machines
Inventory classifications
• GOLF
– Government, Ordinary, Local, Foreign sources – Source of supply
• SOS
– Seasonal, Off seasonal – Nature of supply – E.g. seasonal: leeche fruits,food grains – Non seasonal: plastics, metals etc.
Inventory classifications
• XYZ
–Value of item in storage –Monitor excess inventory – E.g. bulbs – X bulb fixtures - Z
• VED (Vital, Essential, Desirable)
– Criticality of the item – E.g. hospital supplies
ABC – VED …….. Medical Store
• Case of AFMS (Armed Force Medical Services) • Why Inventory Management ??
? Drugs contribute 60% of the total Budget. ? Effective Inventory management – 20% savings
• Among All ABC –VED is Most suitable.
Case Study
• 190 bedded service hospital • Inventory control ? ABC – Unit Cost * Annual Consumption ? VED – Panel of 10 medical personnel ? Combination of ABC and VED ? Category I, II, III
ABC Classification
Classification Value Of Items (Rs.) % of Total Value No. Of Items % of Total Items A 3866452 70% 47 14% B 1104701 20% 73 22% C 552350 10% 205 63%
VED classification
Classification Number Of Items % Of Total Items
(Approx.)
Vital
Essential Desirable
24
160 141
7%
49.5% 43.5%
ABC – VED Matrix
Classification A B C
Vital
4
2
1
Essential
7
5
3
Desirable
9
8
6
ABC – VED Matrix
Classification A B C Total
Vital
Essential Desirable Total
3
34 10 47
2
38 33 73
19
88 98 205
24
160 141 325
ABC-VED Categories
Category I Top Management AV + BV + CV + AE + AD 3 + 2 + 19 + 34 + 10 = 68 (21%)
Category II BE + CE + BD 38 + 88 + 33 = 159 (49%)
Category III CD = 98 (30%)
Middle level Management
Lower level
Conclusion
1) The management of Category I drugs would help in keeping a check on the annual budget and their availability
2) Effort To bring down number of Items in AD Class. > Savings > No Compromise in the quality of services
References
• ABC and VED Analysis in Medical Stores Inventory Control – Lt. Col. R. Gupta et al • Managing Inventory by Multiple Classification of Items – by Harwinder Singh • http://www.managementparadise.com • http://www.ascconline.com/sol_inventory.htm •http://www.citeman.com/1192-inventoryclassification/ •http://knowscm.blogspot.com/2008/03/inventoryanalysis.html
Thank You
doc_676126796.pptx