Material Requirements Planning/Intermediate Items

Definitions

• Any manufacturing item which is neither a raw material nor a product.
• Any manufacturing item which has had some processing done but is not yet a finished product.

Learn By Examples

Let's take an example in a certain real manufacture to have a detailed look at Intermediate Items.

Uncle John is a famous company of producing food sauce for family cooking.In supermarkets, you can find many different kinds of Uncle John food sauce packed in small glass bottles.For instance,a bottle Uncle John curry sauce has the following four stages in its producing process:

1. Buy raw materials from other suppliers: these materials includes curry powder, green peppers, sweet chili, condiment, tomato, or even water.These above are necessary ingredients for making curry sauce which are not produced by Uncle John itself.
2. Preparing the ingredients: prepare these raw materials to make them ready for cooking.For example: cut the peppers , chili and tomato into pieces or slices.
3. Complete curry sauce: mix ingredients and cook the curry sauce.
4. Packing: Package those completed curry sauce into labelled glass bottles after cooling.

Now a bottle of Uncle John curry sauce is ready for market.

For more detail, here is a product structure diagram:

It is clear to see, sliced pepper, cut chili, sliced tomato are not raw materials, they are produced from raw materials. They are also not products, Uncle John never sell them.They are items which do a contribution to make the end product, so they are Intermediate Items. Then what about the "completed curry sauce"? Is it Intermediate Item as well or products?

Even though it is curry sauce seems the same as what we get from a bottle of Uncle John Curry sauce, it is not product. A clear reason is it can not be sold directly unless it get packed in glass bottles.For most manufacture products,there should be a proper measurement standard.For instance, people may sell soft drinks by bottles or by tins, however they may not use something like pots to contain those drinks and sell them.Nowadays, each industry has its standard for selling.Go back to our example, those finished curry sauce are contained in a big container with pipes which are used to pack them into bottles.Customers can not buy those curry sauce directly from the big container (even if it could be , i think nobody would do that), the way to purchase them is to buy a bottle of such products in supermarket. So it is Intermediate Items as well and together with glass bottle and labels, a end product can be made.

The next two images show more clearly the difference between Intermediate item "completed curry sauce" and Product " a bottle of Uncle John curry sauce":

Completed curry sauce:

A bottle of Uncle John curry sauce

From the above example, readers can have a clear mind about what is an Intermediate Item and its relationship to Raw Materials and Products.

See Also

• Enterprise Resource Planning
• Material Requirements Planning
• Raw Materials
• Products