Thursday, November 3, 2011

What is lead time and how the inventory management is maintained

Lead time is the time that elapses between the placing of an order (either a purchase order or a production order issued to the shop or the factory floor) and actually receiving the goods ordered.

If a supplier (an external firm or an internal department or plant) cannot supply the required goods on demand, then the client firm must keep an inventory of the needed goods. The longer the lead time, the larger the quantity of goods the firm must carry in inventory.

A just-in-time (JIT) manufacturing firm, such as some automobile manufacturing fims, can maintain extremely low levels of inventory. Some of these companies take delivery of some goods as many as 18 times per day. However, steel mills may have a lead time of up to three months. That means that a firm that uses steel produced at the mill must place orders at least three months in advance of their need. In order to keep their operations running in the meantime an on-hand inventory of three months' steel requirements would be necessary.

Inventory and Material Management

Inventory Management Module in eresource ERP provides a powerful and flexible set of features to help you manage and report your inventory information. eresource Inventory Management facilitates processes of maintaining the appropriate level of stock in a warehouse. The activities of inventory control involves in identifying inventory requirements, setting targets, providing replenishment techniques and options, monitoring item usages, reconciling the inventory balances, and reporting inventory status.

For more information kindly visit: http://www.eresourceerp.com/What-is-lead-time.html

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1 comment:

  1. This is an excellent guide. An important topic-I'm so happy to see it addressed
    Inventory & Material management module provides a powerful and flexible set of features to help you manage and report your inventory information. inventory management module facilitates processes of maintaining the appropraite level of stock in a warehouse.
    Thanks for sharing such a nice blog...

    ReplyDelete

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