Indirect supplies support operations but are not part of the finished product. For a bottling plant, items like lubricants for machine maintenance and office supplies are indirect supplies, as they aid in operation but do not enter the final product. Managing these supplies in whole-life asset management is critical for cost efficiency and operational support.

In management accounting, reorder level (or reorder point) is the inventory level at which a com-pany would place a new order or start a new manufacturing run.
Reorder level depends on a company's work-order lead time and its demand during that time and whether the company maintain a safety stock.
If a company maintains a safety stock, reorder level calculation changes are follows:
Reorder Level = Average Demand x Lead Time + Safety Stock

Direct and indirect costs of holding inventory include the following:
1. Acquisition costs
2. Holding costs (carrying costs) are the costs associated with the storage and handling of physical stock.
There are two different types of holding costs:
a. Costs related to the value of the goods: financial costs (i.e. the interest on the working capital tied up in inventory, which may be the bank borrowing rate or the company's target for return on capital); cost of insurance; losses due to product deterioration; losses due to obsolescence and redundancy of inventory; losses due to theft, accidental damage etc.
b. Costs related to the physical characteristics of the inventory include the following: storage space; power, heat and lighting of the store; movement equipment; labour costs; administration costs.
3. Costs of stockouts
Reference: CIPS study guide page 100-101
LO 2, AC 2.2

Radio frequency identification (RFID) are items which use radio technology to identify itself and its location subject to having appropriate hardware and software.
RFID tags are made of three different components: an RFID chip, which is an integrated circuit (IC), an antenna, and a substrate.
A RFID Reader is a device that uses radio-frequency waves to wirelessly transfer data between itself and a RFID tag/label in order to identify, categorize and track assets. When combined with the right RFID software, a RFID reader can identify objects quicker, more accurately, at a reduced overall cost, and at various points of the object's lifecycle.
Passive RFID systems use tags with no internal power source and instead are powered by the electromagnetic energy transmitted from an RFID reader. Passive RFID tags are used for applica-tions such as access control, file tracking, race timing, supply chain management, smart labels, and more.
Active RFID systems have three essential parts - a reader or interrogator, antenna, and a tag. Ac-tive RFID tags possess their own power source - an internal battery that enables them to have ex-tremely long read ranges as well as large memory banks.
Reference:
LO 1, AC 1.2

The core idea of lean manufacturing is actually quite simple...relentlessly work on eliminating waste from the manufacturing process. Waste is defined as any activity that does not add value from the customer's perspective. According to research conducted by the Lean Enterprise Research Centre (LERC), fully 60% of production activities in a typical manufacturing operation are waste - they add no value at all for the customer.
On the other hand, agile manufacturing places an extremely strong focus on rapid response to the customer - turning speed and agility into a key competitive advantage.
Reference: CIPS study guide page 127-129
LO 2, AC 2.3