Real-Time Data Capturing & Communicating Systems in Inventory Management

1. Real-Time Data Capturing & Communicating Systems in Inventory Management Lee Hyoung Gon 2001/07/20 SNU-MAI-Lab. Seminar

2. Topics • “The use of automatic data capture systems in inventory management”, IJPE, 1999 • “The impact of real-time data communication on inventory management”, IJPE, 1999

3. “The Use of Automatic Data Capture Systems in Inventory Management” Roger Lindau, Kenth Lumsden Department of Transportation and Logistics, Chalmers University of Tech, Sweden Int. J. Production Economics 59 (1999) 159-167

4. Contents • Introduction • Aim & Scope • Frame of reference • Automatic data capture system(ADCS) • Inventory Management • Method • Cases and results • Conclusions

5. Introduction(1/2)- problems in current ‘manually’ keying system • Many of MPCS systems have yielded poor results due to the lack of accurate and timely information • Time span between event taking place on the shop floor, and its registration and availability in computer systems is too long • To cover the problem they make safety stocks and safety lead times. • Data errors(1 error for every 300 characters entered) -> poor record accuracy • ‘double error’ : the “correct” record is not updated, an “incorrect” record is erroneously changed

6. Introduction(2/2)- Why is Inventory record accuracy (becoming) so important? • If an inventory record which reports inventories (lower/higher) than actual? – (in MRP) • (triggers unnecassary order which drives up inventory and wastes capacity/ stockouts and perhaps, work stoppages) • Timing considerations of different resources for a production order(e.g. material, capacity, tools, gauges) are becoming more complex as the number of components increase and batch sizes get smaller.

7. Frame of reference(1/2)- automatic data capture system(ADCS) • High accuracy, real-time data storage • Some ADCSs that are known • OCR, MICR, Magnetic Stripe, Radio Frequency, Mahine Vision, Voice Recognition, barcode …

8. Frame of reference(2/2)- Inventory Management • Inventories in this context… • Raw material, work-in-process(WIP), semifinished assemblies, finished goods, MRO(maintenance, repair, operating supplies). • The ADCS-inventory management model

9. Studied Companies for survey

10. Summary of results(1/2)

11. Summary of results(2/2)

12. Conclusions • The most common application is found in WIP tracking and shipment control, which ensures that the right product is shipped to the right customer. • ADCS has given rise to results not anticipated prior to the installations(employees : wages, responsibility, work content, motivation are enhanced) • The higher techonology content of the ADCS installation, the better the result.

13. “The Impact of Real-Time Data Communication on Inventory Management” Andrew C. Yao, John G. Carlson California State Univ. at Northridge, Univ. of Southern California, Los Angeles, CA, USA Int. J. Production Economics 59, 1999, 213-219

14. Contents • BackGround • Typical information • Typical information flow without(RFDC) • Typical information flow with(RFDC) • Advantages • Results

15. BackGround • Many current and future distribution systems cannot tolerate data capture delays found in periodic batch processing and reporting of inventory quantities, their locations and movement • RF systems integrate the techonologies of automatic identification systems(AIS), bar-coding, automatic data capture(ADC) and enhance electronic data interchange(EDI) and quick response(QR) systems.

16. Typical Information • External logistical transactions • Purchase or acquisition, movement and location of items in the supply stream include purchase order data, advance shipping notices(ASNs), bills of lading, etc. • Executed by buyers, suppliers, transporters, and receiving personnel, all of whom are responsible for the data integrity • Internal logistical transactions • Receiving, staging, storage, location, picking, status, etc. • Processed by support and indirect personnel in receiving, material handling, storage, accounting, inspection, shipping, and order entry

17. Typical information flow without(RFDC) - outline

18. Typical information flow without(RFDC) - questions • Was the computer aware of all the locations available? • Did lift drivers store the pallets in the correct rack position? • Were all the finished pick activities performed correctly? • Do the operators fall an urgency to put-away the stock? • Does the MIS system provide continuous and accurate data for operators and management?

19. Typical information flow with(RFDC)

20. Results • Receiving: no significant change in productivity • Order processing: no change in productivity, but much more confidence in the information available for serving customers. • Material handling: Units handled/h increased by 6/2% and costs decreased by 5.6% • Reserve stock: Accuracy of the amount and pallet location increased to 99.9% • Order picking: Units/hour increased by 5.2%, picking cost decreased by 6/3% • Shipping: Producticity decreased from additional duties – bar code labels.

21. Open Questions • Computer Vision as a Automatic data collection … • 바코드를 인홰하거나 라벨을 붙이기 어려운 환경 • Rack나 매장내의 진열상태까지 확인해야 되는 경우? • Expand to Supply Chain