1. Key Concepts - Inventory

Material Number:

It is a unique identifying code assigned to each item or product in the inventory. It serves to distinguish and track each item individually, facilitating inventory management, stock tracking, and transaction processing.

Material Description:

It is a brief description of the item or product in the inventory. It provides details about the characteristics, usage, and other important specifications of the material. This description helps employees easily identify products and understand their purpose within the inventory.

Material Categorization:

Classifying materials by types is highly useful for efficient inventory management, as it allows for the classification and organization of the diversity of materials in a production site. The segmentation of materials is divided into types and categories. The categorization of materials has different levels, ranging from the most general to the most specific.

The segmentation by types of materials is divided into Categories of Material Types and Types of Materials, and the division by categories is segmented between Material Categories and Subcategories of Materials.

Material Type Categories:

This segmentation is the most general. The types of material category are standard, and are listed below:

• Raw Materials: Includes basic and unprocessed elements used in production.

• Finished Products: Includes completed items ready for distribution or sale.
• Semi-Finished Products: Represents items in the manufacturing process, having gone through some stages but still requiring further work.
• Tools: All the instruments and devices used in manufacturing, repair, or maintenance processes.
• Consumables: Includes temporary or disposable items necessary for specific operations.
• Spare Parts: Groups components used to replace worn-out or defective parts of equipment and machinery.

Material Types:

The next level of segmentation corresponds to Material Types, which offer a more personalized and specific segmentation. An example of a material type within raw materials is that of critical raw materials. Material types must be configured in the MDM by assigning a code, a description, and assigning it a material type category.

Material Categories:

Another classification available for materials is the category. For example, these can be perishable materials and non-perishable materials. They must be configured from the MDM, and a code and a description must be assigned to them.

Material Subcategories:

This represents a subgroup within the broader categories of materials. For example, they could be materials that require refrigeration or dairy products, and both are part of the broader category of perishable raw materials.

Batch Management:

Within JIKKO, all materials may or may not be associated with specific batches, streamlining the tracking and control of materials with distinct characteristics. For instance, this allows for differentiation based on manufacturing dates, quality specifications, suppliers, or other critical factors within the inventory of a given material.

In the system, this option will always be enabled for all finished or semi-finished products. Thus, each time a production order is completed, traceability of these specific units is ensured. Additionally, all inventory movements will consider this classification.

This option can be enabled or disabled for raw materials and other materials from the material creation or editing form, located in the inventory management category.

Safety Stock:

Safety stock is a minimum quantity of inventory that companies maintain above their expected average demand. It acts as a buffer against variability in demand and supplier lead times. Its objective is to prevent shortages and ensure an adequate level of service to the customer.

Safety stock is assigned at the time of material creation in the Materials module within Inventory Management.

Max Stock:

The maximum stock is the maximum quantity of inventory that a company is willing to maintain in stock for a particular material. It helps control excess inventory, reduces storage costs, and minimizes the risk of obsolescence. When this level is reached, measures can be taken to balance the inventory and maintain an efficient flow of goods.

This can be defined at the time of creating a material in the Materials module within Inventory Management.

Minimum Order Quantity:

It refers to the minimum number of units of an item that a company can request to the supplier in an order. It is established to optimize processing, delivery, and storage costs, taking into account expected demand and logistical constraints. It helps to avoid excess inventory and maintain an efficient flow of products cost-effectively.

Standard Unit Cost:

Standard Unit Cost represents the fixed value assigned to the production of a single unit of a specific item within a manufacturing process. This value is established as a reference for estimating production costs, calculating profit margins, and evaluating operational efficiency. Although it is based on predefined standards, it may vary according to market conditions, changes in material costs, and other factors influencing production.

Actual Unit Cost:

The Actual Unit Cost is the effective cost incurred to produce a specific unit of a product or item. Unlike the standard unit cost, which is a predetermined estimate, the actual unit cost reflects the actual expenses associated with manufacturing a product, including materials, labor, manufacturing overhead, and other direct and indirect costs. It is important to monitor and compare the actual unit cost with the standard unit cost to evaluate production efficiency, identify deviations, and take corrective actions if necessary.

Unit:

In the context of inventory management, this refers to how the quantity of an item or product in stock is measured and recorded. The units of measurement may vary depending on the type of product and the industry in which the inventory is used.

The units of measurement may include:

• Individual Units: This can refer to items counted individually, such as computers, mobile phones, or appliances.
• Weight: Used for items sold by weight, such as food, bulk materials, chemicals, among others. They can be measured in grams, kilograms, pounds, etc.
• Volume: Applicable for liquid products, such as fuel, beverages, oils, etc. They can be measured in liters, milliliters, ounces, etc..
• Length: Used for products sold by length, such as cables, pipes, fabric, etc. They can be measured in centimeters, meters, etc.
• Area: Applicable for products sold by area, such as paint, paper, fabrics, etc. They can be measured in square meters, square centimeters, etc.

Its correct definition is fundamental as many values ​​must be calculated based on this, such as costs, unit conversions, among other options.

Material Picture:

When creating a material in JIKKO, there is the possibility of referencing it with an image. This image can be uploaded directly or through a URL.

Material Measures:

Measurements refer to the dimensions of the product itself, an extremely important value for its handling and storage. Materials should be assigned width, length, height, weight, and volume, with the possibility of using units that best fit the common framework of measurement units used by the company.

Material Packing:

Materials can be classified according to the type of packaging assigned, which includes: inner box, outer box, and pallet. These can be stored in various types of containers such as boxes, cardboard, sleeves, bags, foam, or bottles.

Material Quantity Colors:

In the inventory management module, in the materials section, you will be able to observe the list of materials created in JIKKO. The quantity of available inventory will be indicated with a color code, according to the safety levels and maximum stock configured for each one.

The color assignment is done as follows:

Supplier information:

Materials can be assigned more specific information regarding the batch provided by the supplier in order to trace them from their manufacturing.

This includes assigning the supplier ID, the supplier's manufacturing date, the shipment date, and the unit cost.

Shortage Alert:

The shortage alert is displayed within the inventory management module, specifically in the inventory alerts. This notification arises based on the safety stock assigned to the material. If the available units are less than the established safety stock, the shortage alert is activated.

Expiry Alert:

The expiration alert is determined based on the expiration date assigned to a specific batch during batch editing. Once the expiration date has passed, the units assigned to that batch will be blocked and cannot be used.