-
Raw Materials Management
Management of raw materials is where it all begins. Your raw materials inventory needs to be efficiently handled if you want to operate profitably. This is one of the important criterion that enables you to assess the efficacy of your entire inventory management system. In this dashboard, we highly focus on the quantity management of raw materials (meanwhile, you could check out the quality management dashboard here).
The raw material management dashboard will help businesses to:
- Monitor how much material is used on average per day for production and how much material is left over after the process.
- Keep track of the current amount of goods available in stock, to check up on whether the actual quantity mathces the quantity recorded on the system or not.
- Keep track of the incoming goods through purchasing orders.
| Goals | Questions to ask | Dashboard views |
| To keep track how much material is used and left-over per day on average | What is the average amount of materials needed for a production day? How much left-over material is after a production day? | Daily Used Units, RM Waste, % RM Waste |
| To monitor the amount of finished goods available in stock | How many materials are in stock? What is the quantity of each type? Does the actual number match with the number recorded on the system? | Current SOH $, Inventory Accuracy |
| To keep track of the incoming materials based on purchasing orders. | How many shipments are coming, what is the expected date of arrival? What materials does each trip include, how much is the total value? | Incoming Stock $, Incoming Stock |
*Key Terms
Current SOH $:
Current money in stock
Incoming Stock $:
The value of goods purchased from the supplier being shipped
Incoming Stock:
An indicator that measures the difference between the amount of goods recorded on the system and the actual quantity in stock
RM Waste:
The amount of waste from surplus materials after production
% RM Waste:
The ratio of waste from raw materials to the amount of input materials for production
Daily Used Units:
Average amount of materials used for production in a day
Inventory Overview Report
- The report shows the use of raw materials based on the past production process, the current amount of materials available, and the amount of goods coming in the future. Businesses can easily track all the necessary metrics over time because historical data is saved in the report.
- The accuracy of inventory will affect production, sales and purchasing plans, so regular monitoring of this indicator is essential.
- The amount of material waste after the production process in 1-2 days may be small, but when multiplied by month, by year, the number is probably not small. How businesses can reduce as well as utilize this amount of production waste is also an issue that needs to be considered.
