Controlling inventory can be challenging within any management system because it requires consistent control at each point in the inventory cycle in order to be effective.
M-Power allows tracking of inventory at the following levels
- Item Only - inventory is tracked by item only without any consideration of its location. These can be raw material items or finished good items. While we track the transactions of all items we only display and report on items that are tagged as inventory items.
- Item + Location - inventory can be tracked by items and its physical location, you may have a warehouse in Melbourne and one in Brisbane. These are physical locations and it is important to know where the inventory resides. If you track by location it is important to record the location against every transaction
- Item + Location + Sublocation - a sublocation within a location, for instance, a pallet rack bay within a location. Tracking by sublocation allows you to store one item in multiple places within a warehouse and know where to find the item. If you use sublocations then each transaction must record the sublocation.
TRANSACTIONS THAT AFFECTS RAW MATERIALS INVENTORY
Receiving items at Inwards goods increase inventory by the amount received. Purchasing an item does not affect inventory - but unless it is purchased, the items can not be easily received at inwards goods
Use in Manufacturing
If a raw material is used in manufacturing then it's stock level is reduced appropriately. This can be accounted for in the following ways
- Committing Inventory within A Job
Within the materials section of the job card, or in job summary we can assign items on the jobcard to the job and the inventory will reduce by the calculated amount. This is typically done before the job so that the available balance is known for future jobs
- On the Shop Floor
Staff can use the barcodes on the job cards to scan the materials they actually use in-process
- Post Job
In the job summary section, the raw materials actually used can be assigned to the job - along with any variations from what may have been assigned at the beginning of the job
The most common practice is to commit inventory to the job at the start of the job. This means that it is 'reserved' for the job and so not available for new jobs. If more inventory is required than predicted this can be reconciled 'post job' in the job summary section.
TRANSACTIONS THAT AFFECTS FINISHED GOODS INVENTORY
Sale of Finished Goods
Selling goods from stock will reduce the inventory of those finished goods. Typically a sales order will be raised for goods that can be sold ex-stock. Within the sales order form, there is a button to commit inventory. If you press this button it will create an inventory transaction to reduce the items on the sales order - note that you must select a location, and sublocation on the second tab of the grid if you tracking inventory at that level
Manufacture of Goods for Sale | Replenishment of Stock
If your stock of a finished goods inventory item falls below your minimum stockholding for that item you will need to replenish that stock. We do this by creating a stock order. A stock order form in M-Power is the same as a normal manufacturing order except that the form is optimised for the information that is needed.
When you despatch a stock job through work in progress the system will process an inventory transaction to add the finished goods into stock
Please see this article for an overview of how to replenish stock | Replenishment of Finished Goods Stock
RECONCILING INVENTORY COUNTS
Goods can be damaged or lost outside a job. They can also be moved to other locations, or placed in the wrong locations. The main methods for managing 'non-job' inventory transactions are the:
- Stock count
- Inventory transfer
Further details of stock counting are outlined in this article | Stock Counting
A stock count can be conducted as often as required. When a stock count is applied it looks up the calculated inventory total for an item for each of the levels (item, location, sublocation) and compared this to the counted total. If the total is different it creates a new transaction for the adjustment number that reconciles the calculated total to the counted total.
There may also be items that were not counted in the stock count. Optionally it is possible to set all not counted items to zero. You would do this if you counted all inventory (perhaps at year-end). You would not do this if you were doing a periodic count of your most important items
For Adhoc one one-off inventory adjustments (such as a new count for one item only, or loss of stock) you can use inventory transfers, which is a button in the inventory detail screen.