Inventory

Objectives

Define inventory Identify the types of inventoryExplain why inventory control is needed Identify the various types of

computerized inventory controlExplain why technology is needed in the

fashion industry

What is Inventory?

Goods held on hand for the production process

or for resale

Types of Inventory Manufacturers

A. Raw Materials Fabrics Trimmings Notions

B. Work-in-Progress (WIP) Partially completed

garments Pants legs Jacket lapels Shirt sleeves

Types of InventoryRetailers

Finished goods: completed post-production items

Other inventories Business support goods

ComputersOffice suppliesDisplay propsCash registers

Inventory Operations

Inventory ControlProcess of maintaining

inventories at a level that prevents stock outs and minimizes holding costs

Production Purchasing Ordering

Materials HandlingAll activities of goods

not involved in the production process:

Moving Storage Packing Transporting

Why is Inventory Control Needed?

Too little inventory Lost manufacturing and sales because products not available when needed

Why is Inventory Control Needed?

Too little inventory Lost manufacturing and sales because products not available when needed

Too much inventory Extra handling, product obsolescence, and excessive carrying costs (storage, space, heat, lights, insurance, interest on money, etc.)

Why is Inventory Control Needed?

Too little inventory Lost manufacturing and sales because products not available when needed

Too much inventory Extra handling, product obsolescence, and excessive carrying costs (storage, space, heat, lights, insurance, interest on money, etc.)

The wrong inventory

Lost sales, high costs due to no demand for products already purchased

Computerized Inventory Control

Manufacturing resource planning (MRP II) Determines what resources (people,

equipment, materials) and quantities of each should be used to meet inventory levels

Plans production materials and inventory levels Coordinates data from all departments Determines when to order and deliver

materials based on need

Computerized Inventory Control

Just-in-time (JIT)Executes the plan of MRP IIReduces costs

Less storageLess accountingLess investment

Computerized Inventory Control

Enterprise resource planning (ERP)Coordinates all elements from

manufacturing to retailingMore profits result for all firms

involvedAllows “what-if” models

Discussion Questions:

What is the advantage of U.S. companies to having efficient inventory control when competing with imports?

How does inventory control affect the fashion industry?

Using Technology in the Fashion Industry

Purpose: to integrate companies, goods and services into comprehensive systems through: Communication Interaction

What are the advantages to using technology in fashion?

Lower production costs Higher quality Quicker turnaround time More flexibility (change software instead of

machinery) More accuracy Less financial risk More innovative fashion designs

Computer-Integrated Manufacturing (CIM)

Combination of many electronic steps

Maximum coordinationCentralized control

CAD: computer-aided design

CAM: computer-aided manufacturing

Future Technology in Fashion

Demand flow manufacturing (DFM) Customization Reduces forecasting risks

“Stitchless” sewingSeamless garmentsClimate-controlled clothingFactory/retail layouts by virtual reality Nanotechnology

Nanotechnology

Review

What is inventory?What are the types of inventory?Why is inventory control needed?What are the various types of

computerized inventory control?Why is technology needed in the

fashion industry?