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Inventory Management - Logistics
The INFO.NET Materials Management Module manages and tracks the corporate inventory.

The module covers the following functions:
- Warehouses and Locations
- Materials Management Parameter Definition
- Units of Measure
- Planners and Buyers
- Defining Part Numbers
- Inventory Transactions
- Shipping Transactions
- Receiving Transactions
- Work in Process Transactions
- Scrap Transactions
- Internal and External Inventory Control
- Distributor Inventory Control
- Material Requisitions
- Intransit Inventory
- Reorder Point Inventory Control
- Attribute Transactions
- Serial Number / Lot Transactions
- Cycle Counting and Physical Inventory
- Country of Origin Tracking
- Available to Promise
- Item Hard/Soft Reservations
- Item Usage
- Item Aliases
- Inventory Location Restrictions

Whitepapers covering these subjects are listed at the bottom of this page.

Placing your cursor over any of the features listed below, will give you more information about the subject.

Multiple Warehouse DefinitionsThere is no limit on the number of warehouses that may be defined within an entity, and there is no limit on the number of locations that may be defined within a warehouse.

The entry of a warehouse requires a two character code and a name and address for the warehouse. The only prerequisite to defining a warehouse is to define an entity and load the facilities parameters. The levels of the INFO.NET warehouse data is: entity > warehouse > location>item.

Warehouse Location Definitions Each material location definition includes (among other data elements) an inventory G/L account, a definition of various restrictions in its costing behavior.

Warehouse / Location RestrictionsThere are various, optional, restrictions on the use of a warehouse location including:

· Weight and / or volume. The inventory transaction routines will verify this restriction when material enters a location. As the restriction can be either informational or mandatory, the transaction routines will either notify the user of the situation, or if the limits of weight or volume are violated, the transaction will be refused.

· Number of units. The same requirements as above exist, but in this case, the gross number of units plus the number of units being received will be examined.

· Discrepant Material Location. If the location is defined as a DMR material location, only discrepant material will be allowed into the location.

There are also special designations for in-transit material locations, customer owned material locations, vendor owned material locations and receiving inspection locations.

Inventory Attribute Definitions and ControlThere are certain conditions when inventory items require more information than that provided by a simple identifier (i.e. a part number or catalog item). Attributes and attribute grades provide this additional information and can be seen as a means of expressing more specifications.

· Any number of attributes can be assigned to a part number or catalogue item and each attribute can be defined as a unique numeric entry, a numeric range, a date range or an alpha value.

· Inventory can be viewed showing the various attribute values.

· Attributes can be used to define purchase order specifications or sales order specifications.

· Attribute values can be used for Q/A testing in both receiving inspection or on the shop floor.

Item (Attribute) SpecificationsWhen buying items that require specific specifications (referred to as attributes in the INFO.NET documentation) such as color, dimensional limits, chemical levels, etc, any number of these types of previously defined specifications) can be defined as a part of the items being purchased. Every inventory or indirect catalogue item can be assigned any number of attributes, each of which can be defined by limits or by specific values.

When defining the order, the user can specify the limits or specific value for each of the item’s attributes, and when the units are received, the system will ensure that the units meet the order’s requirements.

Item Attribute Inventory ControlIn the assignment of user defined attributes to inventory items, the user will be asked if the attribute will be used for inventory control purposes. If, for example, an attribute assigned to an item is ‘color’ – of which there are three acceptable values – red, white and blue – the resulting inventory of this item will be controlled by ‘color’. All transactions of the inventory will require the entry of the ‘color’ to be transacted. The reported inventory quantities will also be subdivided down to the color level.

Time Phased Safety Stock and Demand Reorder PointsBoth time phased reorder points and safety stock entries can be assigned to individual inventory items with varying quantities defined by beginning and ending dates.

The time phased reorder points will then be used as demand in the MRP and DRP planning process, sometimes customers use them in place of a master schedule.

In a distribution environment, the time phased reorder points may be a simpler method for inventory planning.

The safety stock will be used as a new floor for inventory planning in the MRP and DRP systems rather than the normal zero quantity floor.

Warehouse Picking Definitions / TransactionsThe picking process involves both a means for selecting the items to be picked and a procedure for effecting the actual transaction of the picked items from stores, and will include the following criteria:

· Ending pick date. It is assumed that all open sales orders or work orders, with items to be delivered as of that date, are available for picking. This entry is compared against the “scheduled” ship or start dates of the orders being picked.
· Shipping warehouse. Each pick list is confined to a specific warehouse.

· Report Selection Criteria. A user can select one or more of the following options to be included in the pick list within the specified dates:
1. All or specific sales orders
2. All or specific freight codes
3. All or specific sales order class codes
4. All or specific customer classes
5. All or specific ship customers

There are numerous other filters and sorts available for use.

First In / First Out Revision Based Inventory ControlInventory records for each part number / revision are held in a FIFO (First in / first out) stack. Non serial number/lot numbered material issues will be taken from the bottom of the stack (the oldest lot) and new receipts will placed on the top of the stack (the most recent lot). In this way the inventory is maintained on a FIFO basis, except for the anomaly of inventory transfers (which will move the oldest lot of a particular part number / revision and move it another location as the newest lot).

Inventory Aging AnalysisAs every receipt of inventory is held as a separate record in the inventory control system, the current age of every inventory lot is known at all times. This means that reports are available that will provide a detailed analysis of the inventory based on age.

The aged inventory report can be sorted by part number, by the age of the inventory lots, or by the aged value of the inventory lots.

Item Document AssignmentsIn the part number or catalogue item data, the user will have the ability to assign documents to be included in individual purchase order line items. These document codes, having been previously defined in the document system may refer to multiple individual documents, and the documents themselves might consist of graphics, videos, web sites or a number of other types of objects, as well as pure text.

Time Fence AnalysisThe system will calculate two types of time fences for manufactured items:

1. A manufacturing time fence that includes the total throughput time for all bill of material levels of a manufactured item will be calculated.

2. A full time fence that includes the time based on #1 above, plus the lead time of the longest purchased item will also be calculated. The number specified in this time fence is the total time required to purchase all of the item’s material and to manufacture the item being analyzed.

The time fence for purchased items will also be maintained but this time fence is merely the purchasing lead time plus the item’s order processing days.

Line Item JIT SpecificationsBased on the purchase order class code, the purchase order entry routines will, optionally, request exact delivery locations and delivery times.

The delivery location can be predefined in purchasing address definitions which include a description of the exact delivery location.

Through the vendor work bench, the vendor has the ability to generate a shipment from their point of view, and a purchasing receipt from the user’s point of view. This function would provide the ability to generate an accounts payable payment to be available when the physical receipt of the material is made.

Country of Origin Analysis / DefinitionIf required, INFO.NET will permit the user to track and report the country of origin of labor, purchased items and manufactured items by percentage of the assembly total cost.

For manufactured items, the country of origin percentages will be maintained at all levels of the manufacturing process.

All of the country of origin data defined by either the user or by the system will always be in terms of percentages. To determine of cost effect of these entries, the system will extend these percentages by either item standard cost, planned costs or actual (average) cost.

Although the user can see the country of origin data in terms of value, the country of origin data will have no effect on the system cost accounting. The results produced by the country of origin data will be for information purposes only.

The country of origin of purchased items will be determined by the country indicated in the shipping vendor’s address data - and the country of a subcontractor or a manufacturer will be read from the country specified in the address of the facility defined in the assembly routing.

Discrepant Material Reporting / Approval / ReleaseInventory locations are defined as either specific discrepant material locations (This is the classic MRB type of location) – or are never available for discrepant material. If the DMR system is in use, at least one location is required that is defined as acceptable for discrepant material.

Any of the system programs that move units out of an inventory location can be used to move correctly authorized units out of a DMR location to another stores location if the units are being accepted ‘as is’. They also could be moved into a non-standard job that will be used to rework the units, or the system’s ‘Return to Vendor (RTV)’ routine could be used to return the discrepant units to a vendor - or the units could be moved out to a scrap G/L account.

Distribution Requirements Planning (DRP) SystemDistribution Requirements Planning (DRP) is defined as:

· The function of determining the need to replenish inventory at branch warehouses. A time phased order point approach is used where planned orders at the branch warehouse level are exploded via DRP logic to become gross requirements on the supplying source. In the case of multilevel distribution networks, this explosion process can continue down through the various levels of regional warehouses (master warehouse, factory warehouse, etc) and become input to the master production schedule.

Demand on the supplying sources is recognized as dependent, and standard DRP logic applies.

· In certain cases where the distribution is for a limited number of items, but a balance must be maintained between multiple warehouse sites, master schedules based on actual scheduled sales orders and sales forecasts may be used to drive the planning process through standard DRP logic. This may result in master production schedules for one or more production sites.

Multi Warehouse / Distributor Inventory BalancingIn an environment that requires inventory redistribution, it is often true that the relationship between the various entities or warehouse is not one that will always permit distribution of inventory between the various warehouses. Although the system default condition will permit full distribution between inventories, the system also permits the user to explicitly specify which inventories are available (or not available) to other entities / warehouses.

Customer Owned Material ControlCustomer owned material that is brought into a user’s facility can be of two types:

· Each customer supplied item may have a unique identifier to a specific customer

· The item may be common among multiple customers

If the item is to be supplied by multiple customers, the item can be isolated in a no cost location that will be created for the use of the specific customer. Since the material is owned by a customer (as with a unit returned by a customer for repair), none of the movements of the item will impact the user’s cost system or the user’s inventory value.

If the item is unique to a customer, the customer code can be assigned to the item at the time that the item is initially defined and it can then be stored in any inventory location. As described above, items of this type will have no cost or inventory value implications.

Vendor Owned Material TrackingThere are two types of vendor subcontracting that may be defined in the INFO.NET system
· Subcontracted assemblies completely built at a vendor. In this situation, there is no restriction on whether the assembly material is supplied by the vendor or supplied by the company, but all of the labor required to build the subcontracted units will be provided by a single vendor. Upon completion of the units, the receiving transaction will return the units directly to stores as completed inventory.

The second type of subcontract work involves one or more operations within a routing being performed at one or more vendors. The routing of an item that is to have subcontracted operations must have defined operations that are performed in “vendor” work centers, i.e. work centers that are located at a vendor. The system sees the subcontracting vendor as merely another work center in an extended shop area. The primary difference is that the value added to the manufacturing of the part by the vendor as handled through Accounts Payable, rather than through normal labor or material transactions.

In Transit Material TrackingTo track the movement of material between warehouses or between accounting entities, the Info.Net system will always create two transactions; the first recording the issuance of material from the first warehouse and the second transaction recording the receipt of material to the second warehouse

In Transit Container DefinitionsInventory items can be moved into predefined containers at any time prior to shipment – and the actual movement of the container can then be transacted into an in-transit location. The position and status of the container, and its contents can be seen during the containers in-transit time.

The receipt of the container will relieve the in-transit location and will place the container’s units into the destination inventory.

Lot ControlOnce lot control is assigned to a part number, each inventory transaction performed for the item will require the entry of the same number of lot controlled items as called for in the inventory transaction quantity. Lot control of an item assumes that the user has assigned either lot control or serial number control to all upper level assemblies into which a lot controlled component will built. The system will maintain the relationship between lot controlled components and lot or serial number controlled assemblies at all levels.

If units in inventory expire, the inventory control system will only permit the units to be transacted against an account number (permitting the removal of the expired units from the inventory).

As a part of the part number definition, a lot expiration code must be defined.

Reports and queries are available that will provide lot (and serial number) traceability through all levels of lot or serial number controlled structures.

Serial Number ControlOnce serial number control is assigned to a part number, each inventory transaction performed for the item will require the entry of the same number of serial numbers as called for in the inventory transaction quantity. Serialized part numbers must also have a unit of measure of “each” and may only be transacted in integer quantities. Serial number control of an item also assumes that the user has assigned serial number control to all upper level assemblies into which a serialized component will be built.

The system will maintain the relationship between serialized components and serialized assemblies at all levels.
Reports and queries are available that provide the history and structure of specific serialized units, including all of its serialized or lot controlled components.

Multi Level Lot / Serial Number Structure ControlThe structure of multi level lot and serial controlled assemblies will be maintained throughout the production process by requesting the parent / child relationships when multi level lot or serial control assemblies enter inventory. This parent / child relationship will be maintained throughout the life of the assembly.

In the case of reworked or repaired lot or serial number controlled assemblies, INFO.NET provides a routine to replace or remove lot or serial controlled assemblies at any level of a multi level assembly.

Hard / Soft Reservation ControlEvery demand on inventory, as with work orders or sales orders, will automatically create soft reservations for the required inventory item. These types of reservation (also called ‘allocations’) can be seen in various inventory queries in reports. With soft reservations, the system will not attempt to protect the inventory for the use that the soft reservation requires.

If, on the other hand, the user wishes to protect a certain quantity of inventory items for a specific use, hard reservations can be created. The sales order entry routines provides this ability by the setting of a system parameter and for other requirements, a manual hard reservation can be created at any time. If a user attempts to remove protected inventory against a disposition other than the disposition (e.g. sales order, work order, etc) specified in the reservation, the transaction will be refused by the system, with appropriate messages.

Inventory Requisition DefinitionsInventory requisitions can be created for any miscellaneous requirement for inventory items, such as for projects, engineering requirements or any requirement can be defined by production orders or sales orders.

Material requisitions will be automatically created by the DRP planning system when trying to balance inventory quantities between warehouses.

Material requisitions are relieved by the normal inventory transaction routines and will be closed automatically when all of the required units have been transacted – or the expiration date on the requisition is reached.

Inventory Cycle Counting / Physical Inventory SystemThe cycle counting system provides a method for counting inventory items and correcting inventory levels in a logical, orderly fashion. Following the assignment of ABC cycle count codes to all of the inventory items, the cycle count system will present a list of items that require counting on a daily basis.

The physical inventory system runs within the cycle count system, but prepares a listing of all inventory items to be counted at one time, rather than on a cyclical basis.

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