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Whole Life Asset Management (L4M7)

Module purpose

On completion of this module, learners will be able to explain methods of inventory management, inventory analysis and the concept of whole-life asset management cost, from idea through to disposal.

Module aim(s)

Whole-life asset management takes into account the total cost of a product or service, from idea through to disposal including purchase, hire or lease, maintenance, operation, utilities, training and disposal. It is important for those involved in procurement and supply to take these elements into consideration when assessing options of buying, renting or leasing equipment. Although costly, there are a range of factors organisations assess to determine the approach to inventory, and the management and control of inventory is an important driver for organisational success. This module is designed for those with responsibility for the whole-life management of assets and enables learners to analyse methods for inventory movement and control and to consider the concept of whole-life asset cost.

Next steps

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Key Module Details

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Icon showing the letters OR, with OBJECTIVE RESPONSE EXAM written below the red-bordered circle.

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Learning outcomes, assessment criteria and indicative content

1.1 Identify the principles, purpose and impact of stores and warehouse design

1.1.1Location of stores and warehouses
1.1.2Stores and warehouse design
1.1.3Factors influencing stores and warehouse layout
1.1.4Flow, space utilisation and flexibility

1.2 Explain the use of product coding in inventory operations

1.2.1Systems for product coding
1.2.2Barcoding and quick response (QR) coding/li>
1.2.3Order tracking technologies
1.2.4The use of radio-frequency identification (RFID) technologies

1.3 Contrast the impact of the use of different warehousing equipment approaches

1.3.1Materials handling equipment (MHE)
1.3.2Pallets and palletisation
1.3.3Containers and containerisation
1.3.4The use of automation in warehousing

2.1 Differentiate between the different classifications of inventory

2.1.1Raw materials, opening stock, work in progress (WIP), safety stock and finished goods
2.1.2Obsolescent and redundant stock
2.1.3Direct and indirect supplies
2.1.4ABC classifications of stock that may apply

2.2 Identify the direct and indirect costs of holding inventory

2.2.1Acquisition costs
2.2.2Holding costs
2.2.3Cost of stockouts
2.2.4Discuss options to reduce costs while mitigating any negative impact on service levels

2.3 Identify techniques associated with inventory control

2.3.1Subjective and objective forecasting
2.3.2Reorder quantities and levels
2.3.3MRP II (manufacturing resource planning) and dependent demand and independent demand items of stock
2.3.4ERP (enterprise resource planning)
2.3.5JIT (just-in-time)
2.3.6Inventory optimisation
2.3.7Inventory performance measures – lead times, service levels, rate of stock turn, stock-outs in a given period, stock cover

3.1 Analyse the contributing factors when establishing whole-life costs

3.1.1Purchase price
3.1.2Hire or lease
3.1.3Acquisition costs
3.1.4Usage costs: maintenance, operation costs, utility costs and training costs
3.1.5Disposal and end-of-life options and associated costs

3.2 Compare the factors to consider when building a whole-life cost model