Order Book > iTMS - Types of Systems

1. FULL STOCK SYSTEM (ITMS - Full Stock System)

A stock system is characterised by the use of client orders to sell inventory that has been manufactured into stock. There are two types of inventory that production draws from.

Inventory Parts and materials

Stock systems require a stock holding of parts to sell. The demand for stock is driven by the stock levels setup in the finished part or material being sold. Quoting and the resulting client orders for stock diminish these levels and create demand for more stock to be produced.

Where demand on stock is marginal or consistently low that part may become “non-stocked” meaning that its stock levels are changed to zero and demand will only be created by a client order.

Where client demand is consistent or growing stock levels can be adjusted up, creating more demand on production to create more stock.

This leads us to another important factor in how this demand is managed in. TIME… Monitoring lead time and stock levels will allow a business to manage capacity in the most efficient way.

Each part that is built in the system can be made up of several levels of parts that are manufactured in a logical sequence to produce finished parts for stock. Some parts take longer to make than others so if levels of stock are increased, enough of that part will be on hand to reduce “fill time” on orders placed.

Ultimately a tool like iTMS will assist greatly in the following objectives for a STOCK SYSTEM.

INVENTORY – Will track history of usage

Stocked Inventory - Will be items that need to be made in economical quantities and be available all the time. Usage of such parts will determine the re-order level, based on lead time of that part. Stocked Inventory will not print a process on a job ticket it will simply give the instruction to take the part out of stock.

Not stocked Inventory - The lead time will be determined by the maximum critical time to produce the part. They will create a process for the job ticket

NON-INVENTORY

Is a phantom part, will not track history of usage

Dummy Parts

Are used in production and client orders for the purpose of adding an item with a sales value only. Dummy Parts will not appear on Job Tickets (in production Orders).

They are used for freight, credit, programming, pattern charges and can also be used to invoice a deposit or progress payment on a job.

2. STOCK SYSTEM – with some PRODUCTION ONLY sales

Can you run a business doing both forms of production? Yes, however, in this situation a company would setup a full stock system end to end and generate “one off” projects as non-stocked parts and these can be invoiced directly from a production order.

3. PRODUCTION ONLY SYSTEMS (ITMS - Production Job Grouping)

A company that runs a production only system does not require client orders to generate demand because there is no stock to sell. Sales come in the form of one off custom designed and manufactured parts. We can still use a quote in this system, to build up the custom project “by design” using costed materials, workcentres and sub-contractors to determine and estimated or budget price and lead time for the project.

Ultimately this will become a series of production orders for a number of projects that are “won” and therefore trigger demand for parts and materials that make the project up.

4. PRODUCTION ONLY SYSTEMS – Laser / Electroplating

QUOTES:

A key feature of iTMS is the ability to build and fully cost parts in a quote ready to convert to an order with no rework. Built into the quote is the ability for sales to determine what the critical path for the finished part will be. However, an import concept to grasp is that only the full critical path for a part can really be quoted as the maximum lead time. On the other hand if the quote contains stocked inventory then the actual lead time is much less. A live or real time lead time can only be determined precisely when that part is actually ordered.

Last Revised: 13/02/2012 SJ