#1 Plan a Strategic Inventory

+ Transcript

The first essential process is to plan a strategic inventory.

All manufacturing companies have the same fundamental challenge - how quickly and reliably can customer orders be shipped and how much inventory will be required to do so?

When you enter a sales order line item in DBA, the program calculates a target shipping date that can reliably be furnished to the customer.

Target shipping dates are calculated based on three item settings maintained here in the MRP Settings screen - the item's Lead Days, Job Days, and Reorder Point.

Times to shipment are reduced by making sell items to stock or by reducing the lead time for make to order items through making and buying key components to stock.

"Strategic inventory" is your plan for reducing times to shipment using the least amount of inventory to do so. You decide which items are to be made or purchased to stock and against those items you enter a monthly forecast and supply days target to minimize inventory.

Here in the Order Policy screen, to stock items are given a Forecast Reorder Point order policy. A Monthly Forecast and the item's Replenish Time are used to calculate a Reorder Point. A Supply Days target and the Monthly Forecast are used to calculate a Minimum Order quantity. Using Monthly Forecasts and Supply Days targets enable you to selectively make or buy sell items and components to stock to reduce times to shipment while keeping inventory to a minimum.

Planning a strategic inventory is an essential element in boosting your manufacturing efficiency. Instead of using guesswork with shipping dates and operating with an inventory that is out of control, with DBA you can plan a stocking strategy that reduces times to shipment using the least amount of inventory to do so.