The average stay in inventory: Reflects how long did a specific product take to get sold in a given period.The consumption rate of a product: The average quantity of an item consumed or expended during a given time interval.The FSN analysis is based on the following parameters mentioned below: The FSN analysis segregates products based on their consumption rate, quantity, and the rate at which the inventory is used. The fast-moving, slow-moving, and non-moving inventory control method is classifying the goods/products based on the following parameters. Now let’s find out what the inventory control method, FSN analysis is. These are goods that are stocked up over a long period of time. Non-moving goods are not utilized at all over a specific timeframe and has a turnover rate below one. Slow moving goods can be problematic and can contribute to waste of capital and resources. Slow moving inventory is defined as stock keeping units (SKUs) that have not shipped in a certain amount of time, such as 90 or 180 days, and merchandise that has a low turn rate relative to the quantity on hand. On the other hand, slow-moving goods are only used for a particular timeframe. Some of the world's largest companies compete for market share in this industry including Coca-Cola, Unilever, Procter & Gamble, Nestlé, PepsiCo, etc. Examples, include milk, eggs, fruit and vegetables and over-the-counter drugs like paracetamol and asprin.įast-moving consumer goods have a high turnover rate and is also very competitive. They are non-durable and sell at relatively low cost. Fast moving goods usually have a low profit margin. There can fast moving and need to be produced on regular basis. There are usually basic day to day items that are used by customers on a regular basis. What is FSN?įast-moving goods are the items in your stock that are utilized regularly. In this article, we will be discuss an inventory analysis technique called the FSN technique that helps you identify the fast-moving, slow-moving, and non-moving products.īy the end of the article, you will have insight into:īefore we learn what FSN analysis in inventory control is, let’s take a look at what FSN in itself means. One such inventory control method in inventory management is the FSN analysis, where FSN stands for Fast, Slow, and Non-Moving goods. They can do this by articulately forecasting demand, reducing inventory carrying cost, managing quality, and increasing the value of the inventory. Inventory management and inventory control's goal is to increase profits and performance of the entire supply chain and order fulfillment process. Inventory is basically articles that are held for resale, for use in manufacturing of a product or for consumption in carrying on business activity.Ī recent study suggests that companies can reap a 25% increase in productivity, a 20% gain in space usage, and a 30% improvement in stock usage, with the right inventory control method. Be it a retail business, wholesale, or any business that deals with inventory or stock or goods, inventory control or inventory management are crucial practices that help drive the profit of a company.
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