PAPETERIES DE MAUDUIT PHILIPPINES, INCORPORATED SAN PEDRO, LAGUNA
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Transcript of PAPETERIES DE MAUDUIT PHILIPPINES, INCORPORATED SAN PEDRO, LAGUNA
PAMANTASAN NG LUNGSOD NG MUNTINLUPA
NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
INVENTORY INVENTORY MANAGEMENTMANAGEMENT
OFOFPDM PDM ((PPAPETERIES APETERIES DDE E MMAUDUIT)AUDUIT)
PHILIPPINES, INCORPORATEDPHILIPPINES, INCORPORATEDSAN PEDRO, LAGUNASAN PEDRO, LAGUNA
In Partial Fulfillment of the Requirements in Inventory Management and Control Leading to the Degree of Bachelor of Science in Business
Administration Major in Management
Presented by:
Jynlastee E. CalvarioCasey Jane G. ChozasMyril Mae M. Magdael
Diana Rose D. Panganiban
Presented to:
Dr. Willfred A. Tacsuan
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T A B L E O F C O N T E N T S
I. Title page
II. Acknowledgement
III. Anecdote
IV. Quality Policies
Vision
Mission
Company culture
Company Values
V. History
VI. Discussion
VII. Documents
Important papers
Pictures
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A C K N O W L E D G E M E N T
This documentation would not be possible without the help; trust and
support of the individuals who play vital roles in making this a success.
We would like to extend their outmost gratitude and appreciation to the
following special individuals behind this research study:
First and foremost, to researchers’ beloved Parents and Guardians, for
without their Moral and Financial support, this documentation will be
impossible to finish.
To Ms. Gemma N. Rozul, for recommending us to the Management
and giving us the opportunity to conduct an observation to PDM Philippines
Industry, Incorporated.
To the Supply Chain Management Officers who gave their time and
effort by elaborating carefully each topics covered by our Subject Inventory
Management and Control.
To Dr. Willfred A. Tacsuan, for his invaluable assistance, support and
encouragement that truly Inspires us to improve our documentation.
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NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
To our friends and classmates who help and gave their support, love
and affection and by sharing knowledge and ideas.
To Manilyn F. Ramento, our fellow students who have been there to
give her support us as well.
And especially to our God, for giving us enough knowledge and ideas
to apply in the documentation and for His guidance and trust that gives
courage and perseverance to the proponents of the study.
♥♥♥
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A N E C D O T E
August 28, 2009. Friday 10 o’clock in the morning. All the members of the
group waited in front of Jollibee, San Pedro Laguna Branch until 10:30 in the
morning. Then, we went to Kimberly Clark Plant and asked the two (2) Guards
there if we could do some documentation. They told us, “Pasensya na, for closing
na ito kasi nabili na ito ng PDM, kung gusto niyo i-try niyo na lang doon”. We went
to PDM just like where the guard pointed us. PDM is adjacent to Kimberly Clark
which made it easy for us to find it. And after that, we started to walk near in the
Main Entrance of PDM and one of my classmate said that we were going to take
an examination for a job vacancy but that is only a joke because that time we saw
many people who just like taking an examination. Then suddenly one guy came
behind our back and he was one of the employees there and he asked “anong
gagawin nyo dito?” after that we told him that we needed to find an Industrial
Company to conduct an observation. We are so lucky because the guy is so kind
because he was the one who talked to the Human Resource Manager to
acknowledge about the observation we needed to do. Thanks for the joke!!!
On September 2, 2009, 10:30 in the morning we came to PDM for the
second time to give an approval letter so that we can have an authorization for our
documentation.
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On September 17, 2009, 11:45 in the morning that is our third time to visit
PDM to confirmed if there is a progress in the letter we gave but unfortunately Ms.
April (Clerk) told us that the concerned Officers of the Management of the
company has not yet talked about the approval of our Documentation because that
time they are so busy because someone will visit them from PDM France but Ms.
April also told us that we have nothing to worry because it is already proposed to
the Management and only their approval is all we need.
That time we realized that it is hard to conduct an observation because
some regarding the product they produce and company profile they have. There
are company and find another one because we have spent a lot of our time and
especially our money for nothing but we needed to encourage ourselves to
support one another.
Fourth day of visiting, September 30, 2009. 11:45 in the morning. We are
so happy because Ms. April told us that she would call us for the schedule given
by the Management. After a few days of waiting for the call of Ms. April we decided
to make an action, so we were the ones who called them. Successfully, we have
known the schedule and time when we will have our documentation.
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October 8, 2009 at 9:10 in the morning. This is what are we waiting
for. Everyone was so excited, and mixed emotions overflowed. The board room
was so cold and it adds chill to us. Managers and Key Personnels’ of Supply chain
Management are now in front of us, Powerpoint Presentations, the feeling of being
in the field of Business, the becoming of being them someday; these are our first
impressions that came up to our minds after meeting. Then, we introduce
ourselves after they have introduced themselves. Mr. Oliver D. Limguangco
(Strategic Procurement Manager) first presented the Company Profile of PDM and
explained everything under the sun. After that, each of us asked Questions for
some clarifications. Mrs. Bernadette O. Villanueva (Customer Service and
Planning Officer) then presented her Powerpoint Presentation for the Planning
Strategies of PDM as well as their sales tactics and the like. The group insert
some questions because the lecture had been the hardest, MRP and MPS are
included with her job. After that, Mr. Edrianne (Purchasing Officer) is the next and
explained to us all about purchasing, its functions and duties. Next is Mr. Roberto
A. Magalino (In-Bound WH Supervisor) who explained about production from the
production area and what is to be delivered. Then lastly, Mr. Felixberto B.
Casuncad (Out-Bound WH Supervisor) explained the products to be delivered to
Clients and make sure it is delivered safely no more, no less.
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After their presentation they offered us some snacks and we ended it up with
a good smile and we thanked them because they gave their time and effort to
make sure our Documentation, really well presented.
When the meeting is over they let take out some foods and bring it to School. After
that we go out and we take some pictures for the additional inputs for our
documentation. That is the end of our observation or visitation.
♥♥♥
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COMPANY VISION, MISSION, CULTURE AND VALUES
V I S I O N
To be sustainably profitable business, a responsible Corporate Citizen, the
employer of choice in the Philippines and the Preferred Supplier of Tobacco –
related paper in Southeast Asia.
M I S S I O N
To produce high-quality cost effective tobacco related papers using the right
processes and technology, and to provide efficient customer service.
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C O M P A N Y C U L T U R E
We are a Company that stands for:
Continuous Improvement
Innovativeness and Adaptiveness to change
“Do it” (Doing right things the first time and all the time)
Driving Results
C O R P O R A T E V A L U E S
Customer Focus
Respect for People
Integrity
Teamwork
Excellence
Sense of Ownership
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H I S T O R Y
Schweitzer-Mauduit Philippines Operations
In June 2005, a subsidiary of Schweitzer-Mauduit acquired the tobacco-
related manufacturing assets of KCPI, a Philippines company. The new
company, PDM Philippines Industries, Inc., is the only domestic Philippine
producer of tobacco-related papers and had, at the time of the acquisition,
about a 60 percent share of the Philippine market. The mill contains two
paper machines and related converting equipment to produce cigarette,
conventional plug wrap and tipping papers.
PDM Philippines Industries Inc. is a multinational company which
purchased the paper operations of Kimberly Clark Philippines, Inc. in
November 2004. Our Principal company is Schweitzer-Mauduit, a company
listed in the New York Stock exchange under the tickler name SWM.
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Diversified producer of premium specialty papers. World’s largest
supplier of fine papers to the tobacco industry. Conducts business in over 900
countries. Employs approximately 3,600 people worldwide. With the
operations in the United States, France, Brazil, Indonesia, Canada and
Philippines. Became an independent public company on December 1, 1995
with the spin-off by Kimberly-Clark Corporation of its United States, French
and Canadian operations that produced tobacco-related products. Listed on
the New York Stock Exchange under the symbol SWM. The Company’s
domestic mills led the development of the North American tobacco-related
papers manufacturing industry, which was originated by Peter J. Schweitzer,
Inc. that began as an importer of cigarette papers from France in 1908.
Philippines (Acquired 2005) PDM Philippines located in San Pedro, Laguna,
Philippines.
PDM Philippines Industries Inc. (PPI) owns and operates tobacco-based
paper mills. The company’s products include cigarette, conventional plug
wrap, and base and printed tipping papers. PPI was founded in 2004 and is
based in Philippines. PDM Philippines Industries Inc. operates as a subsidiary
of Schweitzer-Mauduit France S.A.R.L.
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Schweitzer-Mauduit International, Inc.
Schweitzer-Mauduit International, Inc. (Schweitzer-Mauduit) is a diversified
producer of premium specialty papers and the world’s largest supplier of fine
papers to the tobacco industry. Schweitzer-Mauduit conducts business in
over 90 countries and employs approximately 3,600 people worldwide, with
operations in the United States, France, Brazil, Indonesia, the Philippines and
Canada and with a joint venture under construction in China.
Schweitzer-Mauduit became an independent public company on December 1,
1995 with the spin-off by Kimberly-Clark Corporation of its United States,
French and Canadian operations that produced tobacco-related products.
Schweitzer-Mauduit is listed on the New York Stock Exchange under the
symbol SWM.
Schweitzer-Mauduit’s manufacturing facilities have a long history of producing
paper dating back to 1545. The Company’s domestic mills led the
development of the North American tobacco-related papers manufacturing
industry, which was originated by Peter J. Schweitzer, Inc. that began as an
importer of cigarette papers from France in 1908. The manufacturing facilities
include:
United States
Newberry Operations, located in Newberry, South Carolina
(Acquired 2007).
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Ancram mill located in Ancram, New York
France
Papeteries de Mauduit mill located in Quimperlé, France
Papereries de Malaucène mill located in Malaucène, France
Papeteries de Saint Girons mill located in Saint-Girons, France
(Acquired 1998)
LTR Industries mill located in Spay, France
Brazil (Acquired 1998)
Schweitzer-Mauduit do Brasil mill located in Santenesia Pirai, Brasil
Indonesia (Acquired 2004)
PT PDM Indonesia mill located in Medan, Indonesia
Philippines (Acquired 2005)
PDM Philippines Industries, Inc.
China Paper Joint Venture (Formed 2005)
China Tobacco Mauduit (Jiangmen) Paper Industry Company Ltd.
mill under construction in Jiangmen, China.
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The mill was purchased by Schweitzer-Mauduit in 1940. Two cigarette paper
machines began operation in 1941 and three more cigarette paper machines
were added between 1950 and 1957. A sixth cigarette paper machine was
added in 1961 and was completely rebuilt in 1993 as a “state of the art” high-
speed cigarette paper machine. Today the mill is the sole North American
producer of conventional and lower ignition propensity cigarette papers.
Schweitzer-Mauduit International, Inc. (Schweitzer-Mauduit) is a diversified
producer of premium specialty papers and the world’s largest supplier of fine
papers to the tobacco industry. Schweitzer-Mauduit conducts business in
over 90 countries and employs approximately 3,600 people worldwide, with
operations in the United States, France, Brazil, Indonesia, the Philippines and
Canada and with a joint venture under construction in China.
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Tobacco Industry Products
This category includes fine papers and reconstituted
tobacco products used in the manufacture of cigarettes
and cigars.
Schweitzer-Mauduit International, Inc. is a diversified
producer of premium specialty papers and the world’s
largest supplier of fine papers to the tobacco industry.
Schweitzer-Mauduit’s products fall into two categories – tobacco industry
products and commercial and industrial product.
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Commercial and Industrial Products
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D I S C U S S I O N
Inventory is a list for goods and materials, or those goods and
materials themselves, held available in stock by a business. It is
also used for a list of the contents of a household and for a list for
testamentary purposes of the possessions of someone who has
died. In accounting inventory is considered an asset.
Inventory management is primarily about specifying the size and
placement of stocked goods. Inventory management is required at
different locations within a facility or within multiple locations of a
supply network to protect the regular and planned course of
production against the random disturbance of running out of
materials or goods. The scope of inventory management also
concerns the fine lines between replenishment lead time, carrying
costs of inventory, asset management, inventory forecasting,
inventory valuation, inventory visibility, future inventory price
forecasting, physical inventory, available physical space for
inventory, quality management, replenishment, returns and
defective goods and demand forecasting.
Involves a retailer seeking to acquire and maintain a proper
merchandise assortment while ordering, shipping, handling, and
related costs are kept in check.
Systems and processes that identify inventory requirements, set
targets, provide replenishment techniques and report actual and
projected inventory status.
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COLLEGE OF BUSINESS ADMINISTRATION
Handles all functions related to the tracking and management of
material. This would include the monitoring of material moved into and
out of stockroom locations and the reconciling of the inventory
balances. Also may include ABC analysis, lot tracking, cycle counting
support etc.
Management of the inventories, with the primary objective of
determining.controlling stock levels within the physical distribution
function to balance the need for product availability against the need
for minimizing stock holding and handling costs.
In business management, inventory consists of a list of goods and
materials held available in stock.
An inventory can also be a self examination, a moral inventory.
B U S I N E S S I N V E N T O R Y
There are three basic reasons for keeping an inventory:
Time - The time lags present in the supply chain, from supplier to user
at every stage, requires that you maintain certain amount of inventory
to use in this "lead time"
Uncertainty - Inventories are maintained as buffers to meet
uncertainties in demand, supply and movements of goods.
Economies of scale - Ideal condition of "one unit at a time at a place
where user needs it, when he needs it" principle tends to incur lots of
costs in terms of logistics. So bulk buying, movement and storing
brings in economies of scale, thus inventory.
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All these stock reasons can apply to any owner or product stage.
Buffer stock is held in individual workstations against the possibility
that the upstream workstation may be a little delayed in long setup or
change-over time. This stock is then used while that change-over is
happening. This stock can be eliminated by tools like SMED.
C O N S I G N M E N T I N V E N T O R Y
What is it and When Does It Make Sense to Use It.
Consignment Inventory is inventory that is in the possession of the
customer, but is still owned by the supplier.
In other words, the supplier places some of his inventory in his
customer’s possession (in their store or warehouse) and allows them to sell or
consume directly from his stock. The customer purchases the inventory only
after he has resold or consumed it.
The key benefit to the customer should be obvious; he does not have to
tie up his capital in inventory. This does not mean that there are no inventory
carrying costs for the customer; he does still incur costs related to storing and
managing the inventory. So what’s in it for the supplier? This is where the
benefits may not be so obvious—or may not even exist. Let’s start with a
classic consignment model that has significant benefits for the supplier.
Where Consignment Works Best.
A supplier has a product or group of products that he believes will sell
if he can get them in front of end-users.
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The trick is that getting them in front of end-users means getting them
stocked in retail establishments. Retailers are hesitant to stock the product
because they do not have the same level of confidence in it as the supplier,
they do not want to invest the money and risk getting stuck with something
that may not sell. Because the supplier realizes in-store exposure is critical to
getting his products sold, he offers to stock his product in their stores. This
creates a condition of shared risk whereby the supplier risks the capital
investment associated with the inventory while the customer risks dedicating
retail space to the product. This also creates a condition of shared benefit
because neither the supplier nor the customer will benefit until the product is
sold to an end-user. This shared-risk/shared-benefit condition will often be
enough to convince a customer to stock the product.
For a more specific example, consider a bicycle manufacturer that
produces a wide range of bicycles ranging in price from a couple hundred
dollars to several thousand dollars. He has customers (local independent
bicycle shops) that stock his low-to-mid-priced models but are hesitant to
stock the more expensive bikes because they do not have the confidence that
their customers are willing to pay that much for a bike. And, if they do get a
customer that wants a high-end bike, they could always special order it for
them. The bicycle manufacturer strongly believes that getting his high-end
bikes in the shops where customers can see and touch them is critical in
driving up sales for these models as well as helping to promote his brand
which ultimately drives up sales for the lower cost models. The solution? Well
think you can take it from here. Consider this the classic consignment model
because it is the best-case scenario for applying the consignment inventory
model. It works well for: New and unproven products. 26
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A G R E E M E N T I S S U E S
Both parties need to clearly understand the terms.
Real-time sales or period-end sales.
Time limit (must be purchased or returned within specified period).
What is the freight policy?
What is the return policy?
Who holds responsibility for damage or loss while in customer’s
possession?
What are the Insurance implications?
Exactly how and when is data exchanged? What data is exchanged?
How are miscellaneous transactions processed?
Cycle count adjustments,
Customer Returns (does a return initiate a credit from the supplier?)
Scrap
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L O T S I Z I N G
This model will perform lot-sizing for minimizing total holding and set-up
costs when demands are not equal in each period. Methods include the
Economic Order Quantity (EOQ) Period Order Quantity (POQ), lot for lot,
part-period balancing method or Wagner-Whitin which finds the optimal
schedule. Lot sizing is almost invariably discussed in association with MRP
systems.
B I L L O F M A T E R I A L ( B O M )
a listing of the components their description, and the quantity of each
required to make one unit of a product.
A list of quantities of components, ingredients, and materials required
to make a product.
Not only specify requirements but also are useful for costing, and they
can serve as a list of items to be issued to production or assembly
personnel.
Material Requirements Planning System.
Based on a master production schedule, a material requirements
planning system:
Creates schedules identifying the specific parts and materials required
to produce end items.
Determines exact unit numbers needed.
Determines the dates when orders for those materials should be
released, based on lead times. 28
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MATERIALS REQUIREMENT PLANNING (MRP)
Is a scheduling procedure for production processes that have several
levels of production? Given information describing the production
requirements of the several finished goods of the system, the structure of the
production system, the current inventories for each operation and the lot
sizing procedure for each operation, MRP determines a schedule for the
operations and raw material purchases. This add-in provides all the features
necessary to formulate and solve small examples.
J U S T – I N - T I M E
Just-in-time (JIT) is an inventory strategy that strives to improve a business's
return on investment by reducing in-process inventory and associated
carrying costs. To meet JIT objectives, the process relies on signals or
Kanban between different points in the process, which tell production when to
make the next part. Kanban are usually 'tickets' but can be simple visual
signals, such as the presence or absence of a part on a shelf. Implemented
correctly, JIT can dramatically improve a manufacturing organization's return
on investment, quality, and efficiency.
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S A F E T Y S T O C K
Safety stock is a term used by inventory specialists to describe a level of
extra stock that is maintained below the cycle stock to buffer against
stockouts. Safety Stock (also called Buffer Stock) exists to counter
uncertainties in supply and demand. Safety stock is defined as extra units of
inventory carried as protection against possible stockouts (shortfall in raw
material or packaging). By having an adequate amount of safety stock on
hand, a company can meet a sales demand which exceeds the demand they
forecasted without altering their production plan. It is held when an
organization cannot accurately predict demand and/or lead time for the
product. It serves as an insurance against stockouts.
REASONS FOR SAFETY STOCK
Safety Stocks enable organizations to satisfy customer demand in the event
of these possibilities:
Supplier may deliver their product late or not at all
The warehouse may be on strike
A number of items at the warehouse may be of poor quality and
replacements are still on order
A competitor may be sold out on a product, which is increasing the
demand for your products
Random demand (in reality, random events occur)
Machinery Breakdown
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Unexpected increase in demand
...and more
A commonly used approach is that Safety Stock should be decided based on
the following factors:
Demand: the amount of items consumed by customers, on average,
per unit time.
Lead Time: the delay between the time the reorder point (inventory
level which initiates an order) is reached and renewed availability.
Service level: the desired probability that a chosen level of safety stock
will not lead to stock-out. Naturally, when the desired service level is
increased, the required safety stock increases as well.
Forecast error: an estimate of how far actual demand may be from
forecasted demand. Expressed as the standard deviation of demand.
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I N B O U N D L O G I S T I C S
Inbound logistics does not have an agreed-upon definition in the industry.
Several questions arise when one attempts to define the term, for example:
Where is the "in" in inbound? Is outbound the opposite of inbound?
Clearly the definition of inbound logistics is a matter of perspective. If you are
the receiver of a shipment, the shipment is inbound to you; if you initiate or
send a shipment – as a raw materials supplier, manufacturer or vendor might
do – then it is outbound from you. For inbound logistics planning, the focus of
transportation management is on planning the receipt of the shipment. The
definition of inbound logistics, then, is related not only to the controller of the
shipment process, but also to whom takes ownership of the goods shipped.
Inbound logistics traffic departments do not simply manage shipments from
their own companies (outbound), they plan shipments from other companies
"in" to their location. Suddenly the transportation process becomes infinitely
more complex. With this complexity comes more opportunity to reduce
transportation costs – if transportation is well-managed.
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The diagram shows modes of shipments made during the inbound
shipment process for retailers:
1) From vendor to a pool or assembly point as an LTL move; from
the pool to a DC as a TL move.
2) From vendor as a direct, non-multi-stop LTL move.
3) As a multi-stop from two vendors with a destination stop at both
the DC and a store.
4) As a multi-stop from two vendors.
5) As a multi-stop from the DC to several stores.
6) As a backhaul shipment.
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O U T B O U N D L O G I S T I C S
Examples of other services that are offered in the outbound logistics area are:
Line-hauls
Taking care of the bulk transportation movement of products between two
customer locations, for example a local warehouse and a regional
distribution centre.
Home delivery
Delivering furniture and electrical appliances directly into the homes of our
clients' customers. We offer services such as white glove delivery,
removal of packaging and installation of Furniture items.
Installation
Handling the installation of goods or parts at offices or in other work
environments.
Picking and packing
In most of the warehouse operations, providing order picking and pick & pack
services. Collecting items in the warehouse to combine them into individual
customer orders.
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA
NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
Using the latest and most innovative systems to carry out these functions
to reach the highest possible quality performance levels
Returns Logistics
Managing the returns process for unwanted or damaged goods. These will
be reused, repaired or environmentally disposed of on behalf of the
customer.
Reverse Logistics
This involves the flow of surplus or unwanted material back through the
supply chain after meeting customer demand.
Sub-assembly
This is the assembly of a component from individual parts before onward
distribution.
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA
NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
F I R S T – I N , F I R S T – O U T
First-In, First-Out (FIFO) - This method assumes that the first unit making its
way into inventory is the first sold. For example, let's say that a bakery
produces 200 loaves of bread on Monday at a cost of $1 each, and 200 more
on Tuesday at $1.25 each. FIFO states that if the bakery sold 200 loaves on
Wednesday, the COGS is $1 per loaf (recorded on the income statement)
because that was the cost of each of the first loaves in inventory. The $1.25
loaves would be allocated to ending inventory (appears on the balance
sheet). FIFO gives us a better indication of the value of ending inventory (on
the balance sheet), but it also increases net income because inventory that
might be several years old is used to value the cost of goods sold.
Increasing net income sounds good, but remember that it also has the
potential to increase the amount of taxes that a company must pay.
FIFO gives us a better indication of the value of ending inventory (on the
balance sheet), but it also increases net income because inventory that might
be several years old is used to value the cost of goods sold. Increasing net
income sounds good, but remember that it also has the potential to increase
the amount of taxes that a company must pay.
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA
NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
INVENTORY RECORD ACCURACY
Inventory Record Accuracy (IRA) is a measure of how
closely official inventory records match the physical
inventory. Many managers equate Inventory Record
Accuracy with cycle counting, but there is a lot more to it
than just counting.
The units of measurement are either dollar based or count based. These two
bases have different purposes and may give widely differing results.
Accountants and financial auditors prefer dollar-based measurements of
accuracy. Their concern is to ensure that the inventory value stated on books
and tax returns is accurate at an aggregate level. Discrepancies on individual
items hold little concern provided that positive and negative discrepancies are
roughly equal and the total value is the same.
Operations and material management people have a stronger interest in the
accuracy of individual SKUs. If one SKU is short, they can rarely substitute
some other part or item that happens to be long.
WHY IS IT IMPORTANT?
The reasons for having accurate records are legion. Here are a few of them:
Financial Reasons:
Investors want to know that the book value is accurate.
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA NBP Reservation Poblacion, Muntinlupa City
COLLEGE OF BUSINESS ADMINISTRATION
Lenders who loan money with inventory as collateral want to protect
their loan.
Taxation often depends on inventory value. Overpayment of taxes
reduces profits and underpayment incurrs penalties.
Poor accuracy begets more inventory and requires more capital.
Inventory is often the largest consumer of capital for an enterprise.
Operational Reasons:
Stockouts interrupt production and create delivery delays.
People waste hours looking for misplaced or missing items.
When stockouts are frequent, inventory rises to compensate. This
unnecessary inventory requires space and capital.
Inventory turnover reflects overall manufacturing efficacy.
MRP and ERP systems require very high accuracies (95%-99%) to
function well.
Stockouts increase cost in a hundred ways and sap the time and
energy of everyone.
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA
NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
Methods to improve accuracy include Cycle Counting, Physical Inventory,
Transaction Reduction and Process Improvement. An optimal approach uses
them all.
Physical Inventory-- In a physical inventory, normal operations cease
while a physical count of every item is conducted. The counts are
compared to inventory records and, when necessary, the records are
corrected.
Cycle Counting-- A small number of items are physically counted,
daily, on a random or semi-random basis. The physical count is
compared to the inventory record. When necessary, the records are
corrected.
Process Improvement-- Process Improvement examines the
transaction processes. Changes are identified that reduce the
probability of error.
Transaction Reduction-- The most effective way to reduce errors is to
reduce the number of transactions. Fewer transactions introduce fewer
errors. Kanban, BOM simplification, cellular manufacturing and other
elements of Lean make this feasible.
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA
NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
D O C U M E N T S
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA
NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
P I C T U R E S
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA
NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA
NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA
NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA
NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA
NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA
NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA
NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
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PAMANTASAN NG LUNGSOD NG MUNTINLUPA NBP Reservation Poblacion, Muntinlupa City COLLEGE OF BUSINESS ADMINISTRATION
“Nothing starts easy.Everything begins at some level of difficulty but one thing beautiful is the fact that what are most difficult are also the most rewarding and
the most satisfying”.
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