Management 120

7/28/2019 Management 120

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MANAGEMENT 120

Course outline

Transportation and Logistics Management

The Channel of Distribution The Supply Chain Strategy

Logistic System Design

Procurement

SAP


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STORY


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A wife on the eve of her 50th wedding

anniversary, asked her husband, Dear,tomorrow we celebrate our golden weddinganniversary. For the past fifty years I have beenvery honest and open to you, I believe you knowme so well, there is nothing that I could hide andconceal from you anymore. The husband notknowing what point the wife was trying to driveat, responded, Dear, so with me. I have alwaysbeen honest and open with you. There is

something that for the past 50 years I have beenwanting to know about you. The husbandsurprised, asked, What is


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it? Pointing to a drawer of an old study tablebelonging to the man, the woman inquired,For the past 50 years you have locked thatdrawer and never did reveal to me thecontents. Dear, what is inside? The husband

cannot at that point refuse. Hence, henervously opened the drawer to reveal to thewife two eggs and a bundle of a thousand pesobills. Perplexed, the wife asked, What are

those? The man, realizing that the womanwould just have to know, explained--


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Dear, I am sorry. Please do not be angry. Each of

the two eggs represent the times I was unfaithful toyou.

Hurt, but still glad that her husband committedinfidelity only twice during their 50 years ofmarriage, the wife readily forgave the man. Shethereafter asked about the thousand peso bills,Where did they come from? This time with atrembling voice, the husband answered--


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My love, that is the money I earned

when I sold the other eggs I thenhave collected and could no longer

place inside the drawer.


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CONSUMER PURCHASE INFORMATION

PRODUCT FLOW

SUPPLIER FACTORY W. HOUSE STORE CONSUMER

SUPPLY CHAIN


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THE BULL WHIP EFFECT

Fluctuations in orders increase as they move up the supply chainfrom retailers to wholesalers to manufacturers to suppliers

The bullwhip effect distorts demand information within the supplychain, with different stages having a very different estimate of whatdemand looks like


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PRODUCT FLOW


SUPPLY CHAIN


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Logistics Operation

Purchasing

Demand and Replenishment

Customer Service

PILLARS OF SUPPLY MANAGEMENT


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Logistics

Operation

Customer

Serv ice

Demand &

Replenishment

Purchasing

Warehousing

Handling &

Storage

Inv entory

Management

Transportation

and Deliv ery

SUPPLY

MANAGEMENT

LOGISTICS OPERATION


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Logistics

Operation

Customer

Serv ice

Demand &

Replenishment

Purchasing

Supplier

Selection

Negotiation

and Bidding

Contract

Administration

SUPPLY

MANAGEMENT

PURCHASING


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Logistics

Operation

Customer

Serv ice

Demand &

Replenishment

Purchasing

Demand

Forecasting

Inv entory

Management

Replenishment

SUPPLY

MANAGEMENT

DEMAND AND REPLENISHMENT


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Logistics

Operation

Customer

Serv ice

Demand &

Replenishment

Purchasing

Order taking

Order Entry

Order

Processing

SUPPLY

MANAGEMENT

CUSTOMER SERVICE


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PRODUCT FLOW


SUPPLY CHAIN

CHANNEL OF DISTRIBUTION


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A supply chain is consisting of all parties and theirsupplied activities that help a marketer createand deliver products to the final customer.

A distribution decision that is primarily concernedwith the supply chains front-end or channels ofdistribution that are designed to move the

product (goods or services) from the hands ofthe company to the hands of the customer.

What are the Channels of Distribution?


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Ordering

Handling and shipping

Storage

Display

Promotion

Selling

Information feedback

Activities of the Channel


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Reseller

Retailer

Wholesaler

Industrial Distributor

Specialty Service Firm

Agent and Broker

Distribution Service Firm Others

Type of Channel Member


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Cost Savings in Specialization

Reduce Exchange Time

Offers Variety of product Resellers Sell Smaller Quantities

Create Sales

Offer Financial Support

Provide Information

Benefits offered by Channel Member


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Loss of Revenue

Loss of Communication Control

Loss of Product Importance

Cost of Utilizing Channel Member


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Loss of Revenue

Loss of Communication Control

Loss of Product Importance

Cost of Utilizing Channel Member


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Independent

Under this arrangement a channel member

negotiates deals with others that do notresult in binding relationships. In other words,a channel member is free to make whateverarrangements they feel is in their best

interest.

Channel Arrangement


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Dependent Under this arrangement a channel member

feels tied to one or more members of the

distribution channel. Sometimes referred toas "vertical marketing systems" this approachmakes it more difficult for an individualmember to make changes to how productsare distributed. However, the dependentapproach provides much more stability andconsistency since members are united intheir goals.

Channel Arrangement


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CorporateUnder this arrangement a supplieroperates its own distribution system in a manorthat produces an integrated channel. This

occurs most frequently in the retail industrywhere a supplier operates a chain of retailstores.

Type of Dependent Channel ArrangementTYPE OF DEPENDENT CHANNEL ARRANGEMENT


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ContractualUnder this arrangement a legaldocument obligates members to agree onhow a product is distributed. Often times theagreement specifically spells out which

activities each member is permitted to performor not perform. This type of arrangement canoccur in several formats including:

o Wholesaler-sponsoredwhere a wholesaler brings togetherand manages many independent retailers including havingthe retailers use the same name.

o Retailer-sponsoredthis format also brings together retailersbut the retailers are responsible for managing the relationship.

o Franchisedwhere a central organization controls nearly allactivities of other members.

Type of Dependent Channel ArrangementTYPE OF DEPENDENT CHANNEL ARRANGEMENT


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AdministrativeIn certain channelarrangements a single member maydominate the decisions that occur within thechannel. These situations occur when one

channel member has achieved a significantpower position. This most likely occurs if amanufacturer has significant power due tobrands in strong demand by target markets or

if a retailer has significant power due to sizeand market coverage. In most cases thearrangement is understood to occur and isnot bound by legal or financial arrangements.

TYPE OF DEPENDENT CHANNEL ARRANGEMENT


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Product Issues The nature of the product often dictates the distribution

options available especially if the product requires specialhandling.

Promotion Issues Besides issues related to physical handling of products,

distribution decisions are affected by the type of promotionalactivities needed to sell the product to customers.

Pricing Issues The desired price at which a marketer seeks to sell their

product can impact how they choose to distribute.

Target Market Issues A distribution system is only effective if customers can obtain

the product. Consequently, a key decision in setting up achannel arrangement is for the marketer to choose theapproach that reaches customers in the most effective waypossible.

MARKETING ISSUES IN THE CHANNEL


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Mass Coverage - The mass coverage (also known as intensivedistribution) strategy attempts to distribute products widely innearly all locations in which that type of product is sold. This levelof distribution is only feasible for relatively low priced productsthat appeal to very large target markets.

Selective Coverage - Under selective coverage the marketerdeliberately seeks to limit the locations in which this type ofproduct is sold. To the non-marketer it may seem strange for amarketer to not want to distribute their product in every possiblelocation.

Exclusive Coverage - Some high-end products target very narrowmarkets that have a relatively small number of customers. Thesecustomers are often characterized as discriminating in theirtaste for products and seek to satisfy some of their needs withhigh-quality, though expensive products.

LEVEL OF DISTRIBUTION COVERAGE


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Direct Direct Marketing SystemsWith this system the customer places

the order either through information gained from non-personalcontact with the marketer, such as by visiting the marketerswebsite or ordering from the marketers catalog, or throughpersonal communication with a customer representative who is

not a salesperson, such as through toll-free telephone ordering. Direct Retail SystemsThis type of system exists when a product

marketer also operates their own retail outlets.

Personal Selling SystemsThe key to this direct distribution systemis that a person whose main responsibility involves creating andmanaging sales is involved in the distribution process, generally

by persuading the buyer to place an order. Assisted Marketing SystemsUnder the assisted marketing

system, the marketer relies on others to help communicate themarketers products but handles distribution directly to thecustomer.

DISTRIBUTION SYSTEM


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Indirect

Single-Party Selling System - Under this system the marketerengages another party who then sells and distributes

directly to the final customer. This is most likely to occurwhen the product is sold through large store-based retailchains or through online retailers, in which case it is oftenreferred to as a trade selling system.

Multiple-Party Selling SystemThis indirect distribution

system has the product passing through two or moredistributors before reaching the final customer. The mostlikely scenario is when a wholesaler purchases from themanufacturer and sells the product to retailers.

DISTRIBUTION SYSTEM


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Multi-Channel (Hybrid)

In cases where a marketer utilizes more than onedistribution design the marketer is following a multi-

channel or hybrid distribution system. The multi-channelapproach expands distribution and allows the marketer toreach a wider market.

DISTRIBUTION SYSTEM


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Logistics part of the SC that plans, implements, and controls the

efficient forward and reverse flow and storage of goods,services, and related information between the point oforigin and the point of consumption in order to meetcustomer requirements.

Logistics began in WWII in response to: Expanding product lines Increased product value Competitive market conditions

Integration Key element in logistics development Outbound transportation, field warehousing, application

of a systems perspective to total cost

THE LOGISTICS CONCEPT


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Raw Material Raw Material Manufacturing Finished Goods Markets

Supply Point Storage Storage

Mov ement Mov ement Mov ement Mov ement

Physical Supply Materia l Management Physical Distributions Marketing Logistics

Storage

Storage

Storage

Warehouse

Warehouse

Warehouse

A

B

C

TYPICAL LOGISTIC NETWORKPHYSICAL DISTRIBUTION


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Additional Activities to Logistics Function Inbound transportation Production scheduling Customer service Packaging

Importance of Logistics to US Military effort Persian Gulf War (early 1990s) referred as Logistics War

because of the importance of logistics pipeline supportingthe fighting effort

Integrated logistics concept was obviously critical to

militarys success in the Gulf War US Military is now adopting commercial best practices

(3PLs) to eliminate waste and duplication of assets whileimproving the readiness of their weapons systems



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Raw Materials Plants Distribution Customers

Sources Center

TYPICAL LOGISTIC NETWORKMATERIAL MANAGEMENT


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Fragmentation Ev olv ing Integration

Demand Forecasting

Purchasing

Requirement Planning

Production Planning Material Management

Manufacturing Inventory

Warehousing Logistics

Material Handling

Industrial Packaging

Finished Goods Inv entory

Distribution Planning Physical Distribution

Order Processing

Transportation

Customer Serv ice

Total Integration

LOGISTICS EVOLUTION


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Logistics process provides a systems framework for decisionmaking that integrates

Transportation Inventory levels Warehousing space Materials-handling systems Packaging Customer service

Logistics also involves efficient and effective management ofinventory, whether in motion or at rest, to satisfy customer

requirements and organizational objectives. Transportation service is inventory in motion, therefore, true

cost is more than the actual rate charged by thetransportation company.



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The concept of Supply Chain Management is the newestthrust for many organizations attempting to integratebusiness processes between their channel partners.

Supply Chain Management Integrates product, information, and cash flows among

organizations from the point of origin to the point ofconsumption, with the goal of maximizing consumptionsatisfaction and minimizing costs.

THE SUPPLY CHAIN CONCEPT


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Demand Forecasting

Purchasing

Requirement Planning

Production Planning Material Management

Manufacturing Inv entory

Warehousing Logistics

Material Handling

Industrial Packaging

Finished Goods Inv entory

Distribution Planning Physical Distribution

Order Processing

Transportation

Customer Serv ice

Strategic Planning

Information Technolgy

Marketing/Sales

Finance

Supply Chain

Management

LOGISTICS EVOLUTION TO SUPPLY CHAIN MANAGEMENT


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SCM is more than just words or a concept. In real world,companies that practice SCM use their operations not onlyto reduce costs and inventories, but also to drive uprevenues.

Seven-Eleven Japan Replenishes stores up to eight times a day to provide high

in-stock levels, fresh products, and a varying assortment tomeet customer needs at different times of the day. Itssupply chain capabilities have helped Seven-ElevenJapan become the largest and most profitableconvenience store in that country.

Dell Computers

Direct-to-customers operating model is famous for itsefficiency, driving down costs, and enabling Dell tomaintain the lowest inventories in the computer industry. Itis a powerful revenue generator because it allows Dell toconfigure products that are tailored for specific customerneeds.

THE SUPPLY CHAIN CONCEPT


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Raw Material Raw Material Manufacturing Finished Goods MarketsSupply Point Storage Storage

Mov ement Mov ement Mov ement Mov ement

Physical Supply Materia l Management Physical Distributions Marketing Logistics

Storage

Storage

Storage

Warehouse

Warehouse

Warehouse

A

B

C

TRANSPORTATION AND ECONOMY


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Transportation

One of the tools that civilized societies need to bring orderout of chaos

It provides thoroughfare for the nations products, itprovides a means for traveling to and from work, itsupports our communication networks

Transportation Product A service not a physical product, tangible product A service to the user, but it has basic characteristics that

make purchasing this service similar to buying goods

Aspects of Transportation movement service (speed, reliability, frequency of theservice)

equipment used (comfort and safetypassengers, size,preparation, loading and unloading costfreight)

cost of transportation service

TRANSPORTATION AND THE ECONOMY


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TRANSPORTATION FLOW


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Transportation is the creation of place, time, and quantity utility

Place utility means goods are moved to places where they havehigher value than they had at the places from which theyoriginated.

Time utility means that this service occurs when it is needed Quantity utility is an assurance that the goods will arrive without

damage. Quantity demanded = Quantity deliveredTransportation adds Utility of Goods in terms of: Geographic specialization assumes that each nation, state, or city

produces products and services for which its capita, labor, andraw materials are best suited.

Large-scale production is complemented by geographicspecialization with the use of effective and efficient transportationnetworks, the advantages of scale economies, productionefficiencies, and cheaper manufacturing facilities.

Increased competition would benefit consumers as brought byefficient transportation.

Land values increased that is adjacent to or served by thetransportation improvements.

TRANSPORTATION AND THE ECONOMY


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GROUP REPORT (7 groups)

Present different types/groups under thetransportation provider and present their: Industry Overview

Operating and Service Characteristics

Cost Structure

Documentation requirementReference Any Transportation Management Book or

Management of Transportation by Bardi, Coyle, &Novack

ASSIGNMENT


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GROUP REPORT (7 groups)1. Motor Carriers (Mark Reji Rivera)

2. Railroads (Danica Nabong)

3. Air Carriers (Justine Pielle Lising)

4. Water Carriers (Jan Erick Ancheta)

5. Pipelines (Rachelle Beltran)

6. Intermodal and Special Carriers (Ann Gee Lee Ramos)

7. Global Transportation (Jermaine Cruz)

ASSIGNMENT


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H

Price at point B

E with transport

cost

J

COST PRICE

D

Fixed Maximum price at B

Cost

C

Price atpoint A

O A BDISTANCE

LANDED COST (Value of Goods)


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Cost of product XVariable Cost 60.00 per product.

Fixed cost 10.00 per product.

Transportation cost

Old transport system 30.00 per product.

New transport system 10.00 per product.

How much is the unit cost of the product?

Compute for the product cost using old and new transportsystem.

How much is the effect of new transport system to the unit costof the product?

Which system will be most appropriate if the costumer arewilling to pay for your product in the amount of 90.00? Howmuch is your loss/ income?

LANDED COST EXAMPLE


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Cost of product XVariable Cost 25.00 per product.

Fixed cost 5.00 per product.

Transportation cost

Old transport system 15.00 per product.

New transport system 5.00 per product.

How much is the unit cost of the product?

Compute for the product cost using old and new transportsystem.

How much is the effect of new transport system to the unit costof the product?

Which system will be most appropriate if the costumer arewilling to pay for your product in the amount of 40.00? Howmuch is your loss/ income?

LANDED COST


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SAMPLE LOGISTICS DESIGN


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In the context of our study, INVENTORY concernsthose services or materials that directly orindirectly form part of the ongoing task ofdelivering the services or making the products

that an organization provides or sells.

INVENTORY

It comprises the inputs, services or materialsused, any part-finished items (services orproducts) and those items that are complete andheld awaiting their sale.

Simply put, inventory is a stock of items kept byan organization to meet internal and externalcustomer demands.
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To meet customer demand

Finished product at supermarkets,distributors, traders and manufacturer

DISTRIBUTION/MARKETING

MANUFACTURING

SERVICE/SUPPORT

BUSINESS INVENTORIES

To meet production requirement

Raw and packaging materials at

manufacturing, assembly or fabrication

plant.

To meet needs of operating departments

Operating supplies, spare parts, office

supplies, maintenance supplies
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Normal pipeline inventories maintained because ofthe need to transport inventories from one pointto another when the transit time is not instant

FUNCTION OF INVENTORIES

TRANSIT

BUFFER

ANTICIPATION

Used as protection against stock-outs due to

uncertainties in demand and supply

Covers anticipated or expected changes in demand

and/or supply
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These are created by ordering or producing in

quantities to obtain the lowest unit cost possible

FUNCTION OF INVENTORIES

CYCLE

ECONOMIES

OF SCALE

This covers the need to produce in lot sizes where

inventories are accumulated at certain stages in

the the production process ready for the

succeeding stage.
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Balance the need to SATISFY CUSTOMERS on one hand and the

need to MINIMIZE INVENTORY HOLDINGS on the other

Deal with uncertainties in demand and supply lead times

Categorize stock items according to importance to the firm so

we can focus properly

WHY PLAN? WE NEED TO . . .


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High customer service

Minimum investment

Maintain optimum inventory level to deliver the high customer

service at the lowest possible cost.

OBJECTIVE OF INVENTORY MANAGEMENT


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The oldest goods in inventory are issued

METHODS OF VALUATION

FIFOFirst-IN

First-OUT

LIFOLast-IN

First-OUT

WACWeightedAverage

Cost

SCStandard

Cost

RCReplacement

Cost

The last goods received are issued first

Value received + value on hand = cost per item

divided by total number units

Based on estimated before the item is purchased

Based on estimated replacement cost
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Administrative

Transport

Forms

CommunicationLabor

Ordering/Setup Cost Carrying Cost Stock out Cost

INVENTORY COST

Financing

Ownership

Risk

Overhead

Extra Production

Extra Transpo

Lost Sales

Lost Customer

INVENTORY COST


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Finance Cost interest cost, opportunity cost

Ownership Cost insurance, taxes

Risk Cost obsolescence, theft, damage

Overhead cost warehouse, handling, control

INVENTORY CARRYING COST COMPONENT


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GMR, Inc. had maintained an average inventory of materials andsupplies amounting to Php 100,000,000 during the previous

year. The general manager felt that this level of inventory

could be improved with better management of inventory. So

he send his inventory manager to Letran for further studies.

After his stint in Letran, the inventory manager aggressively

applied some relevant techniques to his work at the company.

For current year, the inventory manager successfully reduced the

companys average inventory to 80,000,000 without any

adverse effect to the companys operation.

As part of the inventory managers accomplishment report, howmuch is the total peso savings which resulted from the

inventory reduction assuming that the annual inventory

carrying cost is 16%?

INVENTORY CARRYING COST EXERCISE 1


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Av erage Carrying

Inv entory Cost (16%)

Prior Year 100,000,000 16% 16,000,000

Current Year 80,000,000 16% 12,800,000

3,200,000

Carrying Cost


or

Average Inventory

Prior Year Php 100,000,000

Current Year Php 80,000,000

Difference Php 20,000,000

Carrying Cost X 16%

Savings Php 3,200,000


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The inventory Manager of GMR, Inc. issues a purchase requisitionto the purchasing dept for 100M pieces of materials A. This

quantity would cover 1 months requirement.

After discussion with his supplier, the purchasing manager asked

the inventory manager if he could agree to increase his

requested quantity to 200M pieces since the supplier hasoffered to give 2% discount from the quoted price of Php10/pc

at 100M piece order quantity provided that the entire quantity

of 200M pieces are delivered at one time.

Assuming that the annual inventory cost is 12%, should the

inventory manager agree to increase his requisition? Whatwould be the basis of his decision?



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SAVING

Purchase Cost Sav ing

Regular Price 10.00 /pc

Discounted Price 9.80 /pc

Sav ing 0.20 /pc

Sav ing at 200,000 pcs @ .20/pc discount 40,000

INVENTORY CARRYING COSTBuy 100,000 pieces:

1st Month 100,000 @ P 10 @ 1% ICC 10,000

2nd Month 100,000 @ P 10 @ 1% ICC 10,000 20,000

Buy 200,000 pieces:

1st Month 200,000 @ P 9.80 @ 1% ICC 19,600

2nd Month 100,000 @ P 9.80 @ 1% ICC 9,800 29,400

Added inv entory cost (9,400)

Net Sav ings 30,600



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System that aims to establish the best possible

control at least possible cost for each class item in

inventory.

Places investment control on A and B class of items

where peso usage value is most important.

THE ABC INVENTORY CLASSIFICATION


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Class A are significant few that comprises 60 to 70percent of total purchasing spend but is 10 to 15

percent of item in the stock.

Class B falls between A and C and usually rangesfrom 20-30 percent for both expenditure and

number of item in stock.

Class C are 10 to 15 percent of purchasing spend butis 60 to 70 percent of total inventory in terms of

volume.

THE ABC INVENTORY CLASSIFICATION


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THE ABC INVENTORY CLASSIFICATION MATRIX

ITEM

GROUP

% ANNUAL

INVENTORY

VALUE

% TOTAL

INVENTORY

ITEMS

STOCK

LEVEL

DELIVERY

SCHEDULE

REVIEW

AND

CONTROL

A 60% - 70% 10% - 20% LOWMOST

FREQUENT

MOST

TIGHT &

FREQUENT

B 20% - 30% 20% - 30% MEDIUMLESS

FREQUENT

LESS TIGHT

&

FREQUENT

C 10% - 20% 60% - 70% HIGHLEAST

FREQUENT

LEAST

TIGHT &

FREQUENT


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Determine the annual quantity usage of each item.

Determine their unit cost.

Multiply cost per unit to annual quantity usage toget the annual peso usage value.

Determine the percentage of each item to the total

annual peso usage value.

Determine the cumulative percentage value byadding the percentage result of each item.

ABC METHOD


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ABC METHOD

ITEM

DESCRIPTION

ANNUAL

QUANTITY

USAGE

UNIT

COST

ANNUAL PESO

USAGE

% TO TOTAL

ANNUAL PESO

USAGE

CUMMULATIVE% TO TOTAL

ANNUAL PESO

USAGE

Material A 800 1,250.00 1,000,000.00

Material B 1,000 400.00 400,000.00

Material C 1,500 300.00 450,000.00

Material D 1,250 250.00 312,500.00Material E 500 1,500.00 750,000.00

Material F 700 1,250.00 875,000.00

3,787,500.00


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ABC METHOD

ITEM

DESCRIPTION

ANNUAL

QUANTITY

USAGE

UNIT

COST

ANNUAL PESO

USAGE

% TO TOTAL

ANNUAL PESO

USAGE


ANNUAL PESO

USAGE

Material A 800 1,250.00 1,000,000.00

Material F 700 1,250.00 875,000.00

Material E 500 1,500.00 750,000.00

Material C 1,500 300.00 450,000.00Material B 1,000 400.00 400,000.00

Material D 1,250 250.00 312,500.00

3,787,500.00


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ABC METHOD

ITEM

DESCRIPTION

ANNUAL

QUANTITY

USAGE

UNIT

COST

ANNUAL PESO

USAGE

% TO TOTAL

ANNUAL PESO

USAGE


ANNUAL PESO

USAGE

Material A 800 1,250.00 1,000,000.00 26.40%

Material F 700 1,250.00 875,000.00 23.10%

Material E 500 1,500.00 750,000.00 19.80%

Material C 1,500 300.00 450,000.00 11.88%Material B 1,000 400.00 400,000.00 10.56%

Material D 1,250 250.00 312,500.00 8.25%

3,787,500.00 100.00%


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ABC METHOD

ITEM

DESCRIPTION

ANNUAL

QUANTITY

USAGE

UNIT

COST

ANNUAL PESO

USAGE

% TO TOTAL

ANNUAL PESO

USAGE

CUMMULATIVE

% TO TOTAL

ANNUAL PESO

USAGE

Material A 800 1,250.00 1,000,000.00 26.40% 26.40%

Material F 700 1,250.00 875,000.00 23.10% 49.50%

Material E 500 1,500.00 750,000.00 19.80% 69.31%

Material C 1,500 300.00 450,000.00 11.88% 81.19%Material B 1,000 400.00 400,000.00 10.56% 91.75%

Material D 1,250 250.00 312,500.00 8.25% 100.00%

3,787,500.00 100.00%


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ABC METHOD

ITEM

DESCRIPTION

ANNUAL

QUANTITY

USAGE

UNIT

COST

ANNUAL PESO

USAGE

% TO TOTAL

ANNUAL PESO

USAGE


ANNUAL PESO

USAGE

Material A 800 1,250.00 1,000,000.00 26.40% 26.40%

Material F 700 1,250.00 875,000.00 23.10% 49.50%

Material E 500 1,500.00 750,000.00 19.80% 69.31%

Material C 1,500 300.00 450,000.00 11.88% 81.19%

Material B 1,000 400.00 400,000.00 10.56% 91.75%

Material D 1,250 250.00 312,500.00 8.25% 100.00%

3,787,500.00 100.00%


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WAREHOUSING CYCLE

RECEIPT

VERIFICATION

INSPECTIONISSUANCE

PREPARATION

FOR ISSUANCE

PREPARATION

FOR STORAGE

ISSUANCE

VERIFICATION

STORAGE


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YES NO

InvDR

P.O.

Inspectionand

Verification

Assign

Storage

Location

Assign Lot

No. if

Required

Label

Pallet

Prepare

Receiving

Report

Update

Records

Forklift Driver

Put Awa

Distribute

and File

Documents

Space

Occupied

Complete

RECEIVING PROCEDURE FROM VENDOR


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YES NO

Production

Tally Sheet/

Stock

Transfer Slip

Inspectionand

Verification

AssignStorage

Location

Label

Pallet

Prepare

Receiving

Report

Update

Records

Forklift Driver

Put Awa

Distribute

and File

Documents

Space

Occupied

Complete

RECEIVING PROCEDURE FROM PRODUCTION


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Most efficient and effective way of identifying

materials, components, assemblies and other items

stocked by an organization.

Without proper coding, problems in identifying and

locating goods in inventory are likely to arise.

WAREHOUSE MANAGEMENT-CODING SYSTEM