6 IMPLEMENTATION

6.1 Preconditions for inventory control

6.1.1 Inventory records

•Updating inventory records

•Auditing and correcting inventory records.

1.periodic counting.

2.cycle counting

6.1.2 Performance evaluation

The purpose of an inventory control system is, in general, to reduce holding and ordering costs while still maintaining satisfactory customer service.

6.2 Development and adjustments

6.2.1 Determine the needs

Developing and implementing inventory control

is a customizing operation.

what items that should be kept in stock

which control methods should be used for different groups of items.

6.2.2 Selective inventory control

ABC inven tory analysis

It is very important to monitor the performance of the A items closely.

6.2.3 Model and Reality

Figure 6.1 Using inventory models in practice.

6.2.4 Step-by-step Implementation

Introduce changes step-by-step Use the new and the old system in parallel

6.2.5 Simulation

One way to evaluate different methods in advance is to use simulation. This means that a mathematical model replaces the real system.

Technically it is quite easy to simulate an inventory system. A simulation model can never give a complete illustration of the real system. Simulations can give valuable information, though, if the simulation model illustrates the real system better in some way.

6.2.6 Short-run consequences of adjustments

Changes in the inventory control will nearly always first result in a higher total stock.

adjustments of the control can mean major changes in the flow of orders.

6.2.7 Education

Good training is needed not only for being able to adjust system control but also for obtaining satisfactory motivation. When clearly understanding how the control system works, it is both challenging and stimulating to work for improved system control.