PR-653 ANALYSIS AND CONTROL OF MANUFACTURING SYSTEMS

SEMINAR PRESENTATION

Seminar Title-Inventory Management using VDE analysis

Department of Production Engineering

Industrial Engineering and Management
NIT Trichy
Under The Guidance of- Presented By-
Dr. P. Asokan MujahidKamal H
214223017
CONTENTS
• Meaning
• V-Vital
• E- Essential
• D- Desirable

• Importance
• VED vs ABC Analysis
• Usage
• Case Study
• Summary
MEANING OF VED ANALYSIS
• Stands for Vital, Essential, and Desirable
• Classifies inventory based on functional importance and shortage cost
of the item
V-VITAL CATEGORY
• Necessary for production or any other process in an organization
• Shortage can severely hamper or disrupt the proper functioning of
operations
• E.g. engine for car assembly plant
E- ESSENTIAL CATEGORY
• Next to being vital
• Shortage may lead to a stoppage of production or hamper some other
process
• Loss due to their unavailability may be temporary
• E.g. tyres
D- DESIRABLE CATEGORY
• Least important among the three
• Unavailability may result in minor stoppages in production or other
processes
• E.g. CD player
IMPORTANCE
• Management can optimize costs by investing
• more in the vital and essential categories
• lesser in the desirable category
COMPARISION BETWEEN ABC AND
VED ANALYSIS
CRITERIA ABC ANALYSIS VED ANALYSIS
FOCUS Value and usage frequency Criticality and urgency
Classifies items into three groups: A, Classifies items into three groups: V,
CATEGORIZATION
B, C E, D
Based on item value and usage Based on item criticality and
INVENTORY
frequency urgency
Used for ordering and stocking Used for prioritization and
DECISION-MAKING
decisions availability checks
Effective resource allocation,
Priority-based management, cost
ADVANTAGES optimized inventory management,
optimization, risk mitigation
improved customer service

Overlooks factors beyond value or Simplified classification, subjective

DISADVANTAGES usage, relies on historical data,
complex implementation
EXAMPLE High-value items such as electronics
determination of criticality, limited
consideration of dynamic factors
Life-saving drugs and medical
equipment
USAGE
• Small and big organizations
• Hospitals and their drug stores
CASE STUDY OF HOSPITAL
• Vital
• Serious functional disruption of patient care services when not available even for a
short period
• Critically needed for the survival of the patients
• Essential
• If not available beyond a few days or a week, the functioning of the hospital can be
adversely affected.
• Lower criticality need
• Desirable
• Doesn’t adversely affect patient care or hospital functioning even if shortage is
prolonged
• Lowest criticality
CASE STUDY OF HOSPITAL
• Cardiac equipment
• Cosmetic products
• Defibrillator
• Oxygen Cylinder
• Pain killers
• Patient trolley
• Sun screen lotions
• Vitamin E capsules
• X-rays machine
CASE STUDY OF HOSPITAL

V – Vital E – Essential D - Desirable

Cardiac equipment Pain killers Cosmetic products

Defibrillator Patient trolley Sun screen lotions

Vitamin E
Oxygen Cylinder X-rays machine
capsules
SUMMARY
• Scientific methods like VED analysis help in maintaining an optimum
level of stock, without posing risks of shortages or non-availability of
essential spares, parts, or products.