Activity
If you are new with this web log we request you to read preface first.
A) Procedures of Inventory Area
Before starting lets have a look at inventory structure in ERP solutions. If you look at the depicted process flows (flow 1 to 4) ( Click here to see it) you will find out that the inventory system is managing processes of all warehouses and stores through the enterprise including purchased items stores, finished product, items and even floor stock Sub-inventories.
However, as you know each of these warehouses points may be owned by a separate area or department in enterprise. For example in most production companies finished product stores are owned by sales and shipment area. Floor stock Sub-inventories are owned by production. Purchased materials warehouse is under a separate department commonly called inventory department or maybe owned in high level by purchasing section itself. Even part of purchased warehouse, which deals with production raw material, might be under the control of production section itself. The most important issue for ERP inventory system is that each and every place which some goods of any type is kept must be defined and declared as an inventory location for the system and for all people in enterprise. This declaration should contain even places which materials are kept temporarily to wait for use, like floor stock inventories of raw materials and subassemblies. This is one of the important best practices, offering by ERP solutions to prevent any loss of inventory
In addition to the above need, warehouses can be grouped in some organizations for categorizing and grouping inventory transaction to make tracking and reporting easy. This grouping is naturally regardless with type of inventory. This organizing can also be beneficial to do separate setups for each set of warehouses. It means that all warehouses which must have common basic parameters can be organized under one organization separate from other warehouses.
Finally, we have to organize each inventory organization into warehouse location and locators.
Warehouse location: it refers to each distinguishable physical place to store goods regardless of the type of goods. Storage place can be a hall, a room, or a zoom with specific boundaries.
Warehouse locator: refers to distinguishable physical points within an inventory location. This mostly is distinguished by row, rack and bin.
If you want to have a look at the entire warehouse structure adapted with ERP system, it is as following diagram.
Inventory organization -------> locations ----------> locators
Note: All of the above organizational structure design to support ERP best solutions are to be done by a group of high-level mangers of warehouses. In a normal factory, having warehouses ownership structure described before, the group responsible for structural definitions described above is consisted of:
A. Sales and shipment representative for finished product warehouses.
B. Manufacturing representative for floor stock Sub-inventories.
C. Purchasing inventory representative for purchasing warehouses.
The above concepts must be taught to all user groups in inventory to help them adopt with that so that they can follow their new procedures.
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