Inventory Mangement

Online Presented at January 2021

Kaweroo Institute
Delivering Inclusive Knowledge & Skills
Rizal Ardianto
Industrial Engineering
PPIC &
Institut Teknologi Nasional - Malang Warehouse
Logistic &
Dua Putra Utama
Supply Chain Makmur
Manager

Wahyu Jaya
Mitra Mulia
PPIC Logistic Warehouse
Dept Head Key Account
Industrial
YCH Indonesia
Engineering Garudafood
Ungaran Sari
Garment Suntory
2018

2017

2016
Email : ‘lazirizalazir@yahoo.co.id’
2006
2004 IG : @zal.ard
Linkedin : Rizal Ardianto
01 Introduction
.

02 Cost of Inventory
.

03 Inventory Classification
.

04 Inventory Control System Agenda

.

05 Safety Stock Management To d a y

.
1 [1] Introduction to
Inventory Management
 Apa itu Inventory?
• Stok barang untuk memenuhi permintaan atau
kebutuhan operasi perusahaan di masa depan
• Inventory dicatat sebagai Kekayaan (Assets)
perusahaan
• Inventory dinyatakan dalam Nilai (Value)
• Inventory Value = Harga satuan x Quantity

6
 Inventory Management

• Tujuan Inventory Management adalah untuk memenuhi

permintaan pelanggan dengan dampak biaya inventory
serendah mungkin
• Key to Success:
• Fills Orders à Satisfy Customers à Create Income
• With lowest amount of Inventory
• Inventory Management is Balancing Art
• Who’s take responsibility ?
7
 Inventory Performance*()
• Inventory Turns is “how many times per year we sell
our inventory”
𝑪𝒐𝒔𝒕 𝒐𝒇 𝑮𝒐𝒐𝒅𝒔 𝑺𝒐𝒍𝒅
𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚 𝑻𝒖𝒓𝒏𝒔 =
𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚

• Days of Inventory is “Average number of days the

inventory before selling it”
𝟑𝟔𝟓
𝑫𝒂𝒚𝒔 𝒐𝒇 𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚 =
𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚 𝑻𝒖𝒓𝒏𝒔

8
 Inventory Turns

• Beginning Inventory à Inventory Value pada Balance

Sheet tahun lalu
• Ends Inventory à Inventory Value pada Balance Sheet
tahun berjalan
𝑩𝒆𝒈𝒊𝒏𝒏𝒊𝒏𝒈 𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚 + 𝑬𝒏𝒅𝒊𝒏𝒈 𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚
𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚 =
𝟐

• Cost of Goods Sold à COGS Value pada Income

Statement tahun berjalan
9
 Tipe Inventory
• Bahan Baku (Raw Materials & Packaging Materials)
• Barang Jadi (Finish Goods)
• Barang Setengah Jadi (Semi-Finish Goods)
• Barang dalam Proses Produksi (Work-In-Process)
• Barang dalam Proses Transport (Good-In-Transit)
• Suku Cadang dan Penunjang (Spare Part &
Consumables)

10
2
[2] Cost of Inventory
 Cost of Inventory

Holding/
Item Cost Carrying Cost
Ordering Cost Shortage Cost

Total Nilai Barang Biaya Simpan Biaya Pembelian Biaya Less Stock

Harga Barang (incl. Kemasan) Storage Cost Cost of Purchasing Staff Penalty Cost

Biaya Transportasi Risk Cost Audit/ Asessement Cost Lost Sales Opportunity Cost

Biaya Custom Clearance Cost of Capital Good Inspection

Biaya Asuransi Pengiriman Coomunication Cost

12
3
[3] Inventory Classification
 Untuk memudahkan pengelolaan inventory
vMembantu prioritas inventory control
vMengurangi resiko stock out
vMembantu akurasi pencatatan stock

Metode klasifikasi inventory

v Inventory type [ kategori, SKU, Status, Ownership]
vABC Analysis/ Pareto
vTurn Over Analysis

Inventory
Classification
14
 ABC Analysis *()

• Class A
• 10 % of units
• 80 % of value
• Class B
• 30 % of units
• 15 % of value
• Class C
• 60 % of units
• 5 % of value

15
 àABC Analysis: How to perform?

• Calculate the Total value (unit cost x annual

usage)
• Short by Total value (descending)
• Calculate % of Total Value,
% of Total Qty and
% Cumulative Value
• Classify to ABC based on %Cumulative Value

16
 àABC Analysis: How to use it?

INVENTORY SAFETY
CLASS CONTROL RECORDS
TAKING
LOT SIZE
STOCK

A Tight Accurate Continue Small Small

B Medium Medium Sometime Medium Medium

C Simple Simple Rare Large High

17
 Turn Over Analysis

FAST
MOVING TURNOVER = > 5x/year

SLOW TURNOVER = 2 - 5x/year

MOVING

DEAD TURNOVER = 0x/year

STOCK

18
 à Turn Over Analysis : How to use it

TRANSPORT
CLASS CONTROL PLACEMENT
SIZE

Near gate/ dock

Fast Moving Tight Big
& easy to reach

Slow Moving Medium Standard Small

Quarantine/
Dead Stock Simple -
Outsource

19
4

[4] Inventory Control System

Inventory Control System
• Continuous system (fixed-order-quantity)
• constant amount ordered when inventory declines to predetermined
level
• Periodic system (fixed-time-period)
• order placed for variable amount after fixed passage of time
• Other Simple system
• Optional replenishment system
• Two bin system
• One bin system

21
 Continuous system (fixed-order-quantity)
Stock
Level

50

Q Q Q Q

0
Time
Q = order quantity (fixed)
Fixed Order-Quantity = Order Quantity always the same
22
 Continuous system (fixed-order-quantity)
Stock
Level

R = reorder
level
50
Q = order
quantity
(fixed)
10
L = lead time

Time
 Reorder Point
• The reorder point is the quantity level of the inventory on hand
that triggers a new order.
• The reorder point is simplest to compute when both demand
and purchase-order lead time are known with certainty.
• Reorder point = Number of units sold per unit of time ×
Purchase-order lead time

24
 Reorder Point: Example (1)
This exhibit
assumes
that demand
and
purchase-order
lead time
??
are certain.

Demand =
247
???tape
packages/week
Purchase-order
lead time =
25
2 weeks
 Reorder Point: Example (2)

L = LEAD TIME

= 10 DAYS

d = DAILY DEMAND
= 2.74

R = REORDER LEVEL

= 27.4 UNITS
??????

WHEN STOCK REACH 28 UNITS à ORDER 90 UNIT

26
 Periodic system (fixed-time-period)
MAX

Q2
Q1 Q4
Q3

MIN

T1 T T2 T T3 T T4

MIN = replenishment level (no lead time)

T = order period (fixed)
27 L = lead time = 0
 Optional Replenishment System

M
q
Q q
q
q
I
I
I I

q=M-I M = Maximum (by trial and error)

If q > Q, order q, otherwise do not order

28
 Two bin system
MAX

B1 B2
B2
Q
Q

MIN
R
B1

29
R = reorder level
 One bin system*()
MAX

B1
Q
Q

B1
R MIN

30
R = reorder level
 Material Requirement Planning
Bill Of Material
Dikenal dengan BOM

BOM 01 Adalah material

pembentuk suatu
Barang atau Produk

Material Knowledge
Minimal
AccStock Jenisnya
Kemasannya
Cara penyimpanan
02
Bagaimana Movingnya
Dll
Contents
Accurate Stock
Warehouse Capacity Stock Awal

05 03
Minimal Order dan Kirim

04
Kemampuan tim untuk melakukan Pemakaian
proses bongkar dan muat. Jumlah pembelian yang Stock Update
Kapasitas Warehouse untuk disyaratkan oleh Supplier Dll
menyimpan Bahan.
 Development of MRP

MRP MRP II ERP

MATERIAL
MANUFACTURING ENTERPRISE
REQUIREMENT
PLANNING RESOURCE RESOURCE
Program PLANNING PLANNING

Inventory All company’s

Inventory
Procurement Resources
Procurement
Financial From Procurement
Accounting To Sales Points

32
5

[5] Safety Stock Management

 Safety Stock

• Safety stock is inventory held at all times regardless of

the quantity of inventory ordered using the EOQ model.

• Safety stock is used as a buffer against unexpected

increases in demand or lead time and unavailability of
stock from suppliers.

34
 SAFETY STOCK
NEW REORDER LEVEL = 30 Q
OR + SAFETY STOCK
21
R
NO
RM
AL

AB
NO
RM
AL
0
5 9 12
SAFETY
9
STOCK STOCK-OUT

LEAD TIME
35
 Reorder
Level Demand during lead time: FIXED
Lead time = FIXED

d = demand during Lead Time

NO Safety Stock
52
0
20
L = Lead Time

36
 Demand during lead time: FIXED
Lead time = FIXED

Demand during Lead Time = 52 units/day

Lead Time = 20 days

REORDER LEVEL = 20 x 50 = 1,040 units

NO Safety Stock

37
 Demand during lead time: HIGHER
Reorder Lead time = FIXED
Level

Safety Stock to cover higher demand

d = demand during Lead Time

Stockout
2 day

52 57

Safety
Stock

0 20
L = Lead Time (fixed)
d (normal)

d (higher demand)
38
 Demand during lead time: HIGHER
Lead time = FIXED

Normal Demand during Lead Time = 52 units/day

Higher Demand = 57 units/day
Increase in Demand = (57 – 52) = 5 units/day

Lead Time = 20 days

NORMAL REORDER LEVEL = 20 x 52 = 1,040 units

NEW REORDER LEVEL = 20 x 57 = 1,140 units

SAFETY STOCK = 20 x (57 – 52) = 100 units

39
 REORDER LEVEL = d X L

Reorder
Demand during lead time: FIXED
Level Lead time = LONGER

Safety Stock to cover longer lead time

d = demand during Lead Time

Stockout

52

20
Safety
Stock L = Lead Time (normal)
24

0
L = Lead Time (longer) d (firmed)

40
 Demand during lead time: FIXED
Lead time = LONGER

Demand during Lead Time = 52 units/day

Normal Lead Time = 20 days

Longer Lead Time = 24 days
Additional Lead Time = 4 days

NORMAL REORDER LEVEL = 20 x 52 = 1,040 units

NEW REORDER LEVEL = 24 x 52 = 1,248 units

SAFETY STOCK = 4 x 52 = 208 units

41
 REORDER LEVEL = d X L

Reorder Demand during lead time: HIGHER

Level Lead time = LONGER

52
Safety Stock to cover longer lead time
and higher demand
57
d = demand during Lead Time
Stockout

L = Lead Time (normal)

Safety 20
Stock 24
L = Lead Time (longer) d (normal)

d (higher demand)
42
0
 Demand during lead time: HIGHER
Lead time = LONGER

Normal Demand during Lead Time = 52 units/day

Higher Demand during Lead Time = 57 units/day
Additional Demand = (57 – 52) = 5 units/day

Normal Lead Time = 20 days

Longer Lead Time = 24 days
Additional Lead Time = 4 days

NORMAL REORDER LEVEL = 20 x 52 = 1,040 units

NEW REORDER LEVEL = 24 x 57 = 1,368 units

SAFETY STOCK = 368 units

43
 Safety Stock

Daily Demand:
Daily Demand:
Fixed = 52 units Mean = 52 units

Lead Time:
SAFETY STOCK = 0 SAFETY STOCK = 100
Fixed = 20 days

Lead Time
SAFETY STOCK = 208 SAFETY STOCK = 368
Mean = 20 days

44
 THANKS!
For your Attention

45