Unit-VII material management -VED analysis slide share

this presentation contain like introcudntion, definition, purpose, classification, matric level, control of VED etc.

1. VED ANALYSIS DR.ANJALATCHI M.SC(N)MD(AM) MBA(HA)

2. LEARNING OBJECTIVE To introduce the topic To define the VED analysis To list out the purposes of VED analysis To describe the method of VED analysis To explain the mixed method of ABC & VED analysis To understand the control method of VED analysis To summarize the topic To conclude the content To review the references related to the topic.

3. INTRODUCTION

4. DEFINITION OF VED ANALYSIS VED analysis  is an inventory management technique that classifies inventory based on its functional importance. It categorizes stock under three heads based on its importance and necessity for an organization for production or any of its other activities.  VED analysis  stands for Vital, Essential, and Desirable.

5. MEANING OF VED ANALYSIS

6. PURPOSE OF VED In a manufacturing organization, there are number of items which are very vital or critical in production. Their availability must be ensured at all times for smooth production, so need to be strictly controlled. Essential items follow vital items in their hierarchy of importance. Desirable items are least importance in terms of functional considerations , which are loosely controlled at the lower level.

7. VED METHOD

8. CONTINUED

9. CONTINUED

10. IMPORTANCE OF VED ANALYSIS It is of utmost importance to any organization to maintain an optimum level of inventory. Maintaining inventory has its costs, and hence, this analysis bifurcates inventory in three parts to help in managerial decisions on inventory maintenance. There are four types of costs to maintain stock which are:

11. CONTINUED Item cost This is the cost or price of the inventory items. It is the actual purchase value of holding stock. Therefore, it will be high with more inventory and vice-versa. Ordering / Set-up Cost The purchase of inventory involves certain costs. These may include transportation charges, packing charges, etc. Holding Costs After the purchase of inventory items, there are a few costs too. These may be related to storage, insurance charges of stock or inventory, labor costs associated with the handling of stock, etc. Moreover, it includes any damage, leakage, or pilferage of the stock in hand.

12. CONTINUED Stock Out Cost These costs are the result of an inventory item running out of stock. It includes loss of production due to a spare part getting out of stock. Moreover, this may delay the product sale. Also, the product itself may get out of stock. Such losses are a part of the stockout cost. VED analysis is a crucial tool to understand and categorize inventory according to its importance. Because of it, the management can optimize costs by investing more in the vital and essential categories of stock and lesser in the desirable category of inventory.

13. MIXED METHOD

14. COUPLING MATRIX METHOD

15. MATRICX OF ABC AND VED ANALYSIS

16. EXAMPLE OF MATRIX MODEL

17. Control method of VED

18. Continued

19. SUMMARY Still now we have discussed about VED analysis like introduction, definition, Purpose, methods, classification, control method of inventory system. I hope you all understand about VED analysis and its significance.

20. CONCLUSION

21. REFERENCES

22. RESEARCH EVIDENCE