VED Analysis for Material Management

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VED Analysis for Material Management
It is always necessary to understand what is lying in our inventory. Hence we need to classify all items and then proceed to the control process.
This classifying can be done with the help of VED analysis, where:
V = VITAL. These are the most important materials in the production of a product. They are usually a hard core requirement of the product. They are usually costly and need to be maintained efficiently. Example: in manufacturing of automobiles, tyre assembly is a vital item.
E = ESSENTIAL. Thees are additions to the vital items. They are usually sub assemblies and need to always be in stock. They are cheap as compared to the vital items, but can bring the whole production to a halt if they're not available on time. For example if we have the tyre assembly, but we don't have washers on time, the whole production has to be halted, as it would be impossible to assemble as per safety norms.
D = DESIRABLE. These are not that important with respect to production, and the process can be postponed. The production won't be hampered in any way. For example, the music system in the car could be a desirable item. If they're missing, the cars can still be assembled and kept aside. As soon as they become available they can be fitted.
Thus we need to manage the materials in stock accordingly.
- Vital goods must always be avaliable, while preventing they are overloaded as their cost is high.
- Essential goods with high inventory stock, as they may hamper production and they are cheap and require not a lot of space. So they can be ordered in bulk.
- Desirable goods may or may not be in stock or as per the requirement.



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