Small Encyclopedia of Inventory Information

In 2BizBox “Part Master Properties” lists three rows of numbers for the part’s inventory information. These numbers show the part’s status in different links: where the part is, how it is used, how much it costs and so on. Inventory information is the basis of a manufacturing enterprise. Making clear for these numbers will greatly improve your understanding of 2BizBox ERP.

On Hand: Quantity of the part that is available in your warehouse.

Available means the part is ready for use or sale, without any quality problems. The parts might be scattered in many storage locations, even in different companies if you’ve enabled multiple warehouses. Click buttonto see detail locations of the part.

On Demand: Quantity of the part your enterprise is demanding for.

Where does demand come from? Basically demand is driven by two factors: commodities in sales order and materials required by work order. When your customer needs 100 Part A, you create a sales order and approve it. In this way you create the demand for 100 A in 2BizBox system. After that, you set up A for manufacture and find the work order requires 100 Part B and 100 Part C. Again you create the demand for 100 B and 100 C. Different from MRP, On Demand Quantity reflects the actual desired parts of the system. Whether your storage of A, B or C is enough for sale or manufacture or not doesn’t change On Demand Quantity. It is the decision of system operator to buy or manufacture to meet these demands.

On Order: Quantity of the part that is being purchased or manufactured.

That is to say, items in approved purchase orders and work orders increase On Order Quantity of the part. Purchase order and work order brings more parts into the system. While these orders are in process, the parts are “ordered”, waiting to be received to the warehouse. Once these orders are finished, On Order Quantity turns to inventory.

InWIP: Quantity of the part that has been issued to the work order.

Work order tells what product to produce and what materials to issue. When warehouse issues part to work order, part inventory decreases and part InWIP increases. After the work order is finished, part InWIP disappears because the raw material has been consumed or processed to a finished product.

InSIP: Quantity of the part that is waiting to be shipped.

In 2BizBox, the “Proforma Shipper” function enables you to ship together sales orders to the same address. After adding sales orders to “Proforma Shipper”, it may still take several days to package and box up. Before shipping, quantity of these products remains in system as InSIP. Part InSIP only exists after the “Proforma Shipper” is created and Packing Box Item is added. At the same time, part inventory decreases. By finishing the “Proforma Shipper”, Part InSIP disappears.

InSIT: Quantity of the part that has been purchased and on the way of transportation.

To see the number of Part InSIT, you need to enable “Vendor Online” function. Before shipping, your vendor should operate online shipping to the related purchase order. After you receive the parts to your warehouse, Part InSIT decreases and inventory increases.

On Loan: Quantity of the part that is lent out for temporary use.

2BizBox keeps record of the part or tool lent out in “OnLoan” box. You can check the detail loan information by clicking button aside. When returning the part to warehouse and closing the loan order, On Loan turns to On Hand.

InQA: Quantity of the part that is being inspected for Quality Assurance.

Part that is being inspected has various problems and therefore cannot be used in the system. Part InQA is a vital number indicating the quantity of unqualified parts and is created by NCR. After quality inspection, the part goes to several places: return to warehouse after repair; return to warehouse after waiving or degrading; discard as useless part and scrap. After corresponding process is done in NCR, InQA number disappears accordingly.

List Price: User-defined Official quotation. It appears on sales order part item price after set in part properties.

Avg Cost: The part’s average cost calculated by system. Do not make informal adjustment.

Std Cost: The part’s Standard cost. Similar to List Price, Std Cost is defined by enterprise user to calculate Avg Cost. E.g. Std Cost can be the part’s purchasing price, manufacturing cost, etc.

Last PO # & Last PO Cost: Record of the part’s last purchase price and purchase order number. Some enterprises use “Last Purchase Cost” to do cost accounting because they consider it as a proper cost of the part in current market.

Part Class: Particularly used in inventory cycle counting, Part Class separates specific counting cycles for different parts. The setup of Part Class is based on Pareto principle, also known as ABC-analysis.

Min Qty & Max Qty: Min Qty is also called safety stock in inventory management. It describes a level of extra stock that is maintained to mitigate risk of stockouts due to uncertainties in supply and demand. Enterprise must supply for the part when “Part On Hand” is less than the Min Qty. Max Qty is the Maxim quantity of storage that the enterprise is willing to bear. Both Min Qty and Max Qty will influence MRP

Qtr Usage & Yr Usage: Qtr Usage is the Quantity of the part that is used in the last quarter. Yr Usage is the Quantity of the part that is used in the last year. For enterprise managers and warehouse operators, with these numbers, they are able to know the consumption of particular parts.

These are very basic explanations for inventory information. Some numbers are defined by users while others are changing with business orders. You can comprehend them by operating 2BizBox system and see how inventory information change with orders. There’s no need to memorize, because numbers are generated, transferred and disappeared as the system runs. We strongly suggest you to make very clear of these numbers because soon you’ll find you’ve learned to use 2BizBox ERP already!