Manufacturing Inventory Management
The stock section is designed for the stock manager. Overview of inventory management with the help of MRPeasy:
- How to gain a clear overview of your stock – what is on-hand, booked, or expected to arrive?
- How to maintain minimum inventory levels?
- How inventory levels are adjusted by receipt of purchases, consumption in manufacturing, finishing manufacturing orders, shipping, and manual adjustments?
- How to manage internal storage locations and several stocks?
- What are stock lots?
In this video, we will go over stock management in MRPeasy:
- How to gain a clear overview.
- How to receive, ship, consume and perform other operations.
- How to adjust inventory levels manually.
- How to manage locations and separate stock.
- What are stock lots.
An overview of stock
The “stock – items” section shows a detailed overview of all your items in stock. The table can be customized – columns can be added, hidden, or rearranged. Clicking on specific numbers brings up detailed reports, plus each stock item has individual reports.
For a clear overview of stock levels, MRPeasy distinguishes between inventory currently on hand, and inventory expected to arrive in the future. In addition, some items can be available for free use, while others are booked for a certain manufacturing or customer order.
In total, there are six numbers, which give a clear overview of inventory in different statuses:
- “In stock” shows the total quantity on hand.
- “Available” shows the quantity on-hand that is available for free use. This can become negative.
- “Booked” shows the quantity on-hand already booked.
- “Expected, total” shows the total quantity expected to arrive in the future.
- “Expected, available” shows the part of the expected total quantity available for free use.
- “Expected, booked” shows the part of the expected total quantity already booked.
In addition, there’s a seventh column showing work in progress inventory. That is, the quantity consumed in unfinished manufacturing.
Minimum stock level and “critical on-hand” report
Each item should have a minimum stock level. Generally, if not anything else, this should be at least 0, but not left undefined.
Then, if you do not have plenty of available stock of an item, and are not expecting to receive it, the software will show this item in the “critical on-hand” report.
This report is found both in the “stock” and “procurement” sections.
From this report, it is possible to raise manufacturing orders for manufactured products and purchase orders for procured items to replenish the stock levels.
How inventory levels are modified
Receiving purchase orders fully or partially
If you are in charge of receiving goods and need to report receipt of purchased goods, then go to the “procurement – purchase orders” section and find the relevant purchase order.
Open the purchase order and count the received goods.
If you received the full order quantity, you only need to enter the “arrival date” and “save”.
If the received quantity is different from what was ordered, then you must enter the received quantity in the “expected quantity” field. This field shows the quantity to accept into stock; it is prefilled to full quantity by default.
Now “save.” The quantities written into the “expected quantity” field are counted into stock and the remaining is still waiting to be received.
If you reported a receipt in error, open the “target lot” of the purchased item and change its status back to “planned.”
Consuming parts in manufacturing and receiving products from manufacturing
At first, parts must be booked for a manufacturing order, which means that at this stage, these are still in stock but reserved for a certain job.
Once the parts are marked consumed in the manufacturing order, they will be counted off stock and the quantity can be seen in the “work in progress” inventory until manufacturing is finished.
Once a manufacturing order is finished, the products are taken into stock; they are not “expected” any longer. At the same time, the materials that were consumed in that manufacturing order are cleared from the work in progress inventory.
How to consume materials and report the progress of manufacturing orders is described in the video for the production worker.
Shipping products to customers
To ship some products, a shipment must be planned first, and then items need to be picked from stock.
Depending on the situation and how responsibilities are divided in your company, there are several routes for this.
One way is to plan a shipment from inside a “customer order.” This approach is explained in the video for the sales manager.
Alternatively, a shipment can be planned from the “stock – shipments” section of MRPeasy.
To plan a shipment, click ‘+’.
Choose the planned day of shipment.
Choose the customer order or several, which will need to be shipped.
All booked items from the customer orders will be automatically pulled to this shipment. You can edit quantities, for example, if you plan to make a partial delivery.
Check the delivery address, enter any notes and “save.”
Currently, this is a planned shipment – this screen is a digital picking list for reporting the shipment. Here, it’s also possible to print out the waybill and the picking list.
To report shipping, you can report pickings line-by-line, or all goods at once.
The goods have now left the stock.
Stock take or cycle counting, adjusting inventory levels manually
Because of a stock take, or for some other reason, inventory levels might need to be manually adjusted.
This can be done at the “stock – inventory” page.
To make an adjustment, enter the new total quantity and save. The software will automatically increase or decrease the stock level.
Keep in mind that, when increasing the inventory level, the software uses the last known in-stock cost of the item. If the item has never been in stock, the cost is considered 0.
When decreasing the stock level, MRPeasy uses FIFO method on available items. This can also result in bookings being deleted; for example, for manufacturing or customer orders. The detailed method is explained in the User Manual.
It’s also possible to upload the new values from a spreadsheet; instructions are available in the User Manual.
As an alternative option for making manual adjustments, it’s possible to manually create a write-off at “stock – write-offs” or add inventory by creating a stock lot at “stock – stock lots.” When you perform these actions manually, you have more detailed control, like choosing a “write-off type,” entering notes and more.
We do not recommend manually adjusting of stock levels often.
Before an adjustment is made, the reasons need to be investigated and the mistake should be fixed where it was made instead; e.g. when reporting some action was forgotten, then this should be done instead.
Internal storage locations. Moving items inside the stock
In MRPeasy, each stock item can have a default storage location – a shelf, bin, room, or other type of location in your stock.
By default, when items are received in stock, they are placed to the default location.
Also, it’s possible to move some items to another location and keep quantities of the same item in different storage locations.
To move an item, open a stock lot of that item, and in the “storage locations” section, click “move stock item,” enter the quantity, choose the new location and “save.”
When items need to be picked from stock, e.g. for manufacturing or shipping, then the software shows the location where to pick them.
Multiple stocks and production sites
Starting from the Enterprise plan of MRPeasy, it is possible to enable multi-site and multi-stock support.
When this function is enabled, you can manage all your stocks or sites separately. Items can be procured directly to one or another site, inventory is tracked separately, manufacturing resources are unique for each site, and so on.
If it’s necessary to move items from one site to another, a transfer order must be created.
To do this, go to the “transfer orders” tab of the “stock” section and click “plus” to add a new transfer order.
Enter all the details. Choose the “from” and “to” sites. Select the items to ship, and “save.”
Currently, this is a planned transfer order, not shipped yet. To ship the items, report picking line-by-line, or all at once.
The items are now shipped.
Once the items are received in the other site, open the transfer order and change its status to “received.” If there were any related transfer fees, enter them, and “save.”
Stock lots and lot traceability
The basis of stock management in MRPeasy is the concept called “stock lot tracking.”
Stock lots allow tracking and managing inventory in detail, according to strictest regulations, but equally important, they allow you to automatically apply the First-In First-Out method.
What is a “stock lot?” Generally, one stock lot is one batch of some item.
For example, each time you purchase a material, you will receive a new batch into stock; therefore, a new stock lot number (also known as a “batch number”) is created to identify it.
You may have many stock lots of the same item – received at different times, with different costs, possibly from different vendors, with different expiry dates, and so on.
If you do not track stock lots in your physical stock, then just keep in mind that this is how MRPeasy keeps track of your inventory.
If you do track stock lots in your physical stock, then feel free to make use of the materials and products traceability functionality of MRPeasy.
For example, it’s possible to print out labels of stock lots, attach files and notes, or report which stock lots of materials were consumed in manufacturing, see actual costs of products, which specific products were shipped to a customer, and much more.
In this video, we demonstrated how to work with stock in MRPeasy.
To learn more about the functionality of MRPeasy, please see our other videos!
Thanks for watching!
Keywords: Inventory management, safety stock, stock adjustments, receiving purchases, material consumption, shipping, stock take, cycle counting, storage locations, several stocks, stock lot tracking