Is Slow Moving Inventory Really An Easy Target for Inventory Reduction? Inventory that is slow moving is often seen as an easy target for people undertaking an inventory review. Rather than undertake a structured review process (such as the Inventory Cash Release Process) many people will target slow moving inventory as if it is some […]
Inventory Management Formula – Knowing is the Easy Part!
In Fact, Just Knowing Inventory Management Formulas is Not Enough Does it really matter if you do or do not understand all the inventory management formula? Does it matter if you know or don’t know how to calculate the Reorder Point or the Reorder Quantity for individual SKUs? Yes, it does. How many people […]
The Right Spare Parts Metric – Accuracy Vs Precision
Performance measurement with the right metric is the cornerstone of all improvements efforts. If you don’t or can’t measure where you are now versus where you were before, then how do you know if you have improved? Just as importantly, however, is knowing if your measure actually reflects your current position or the issue that […]
What is Your Sphere of Influence?
Have you ever attended a sporting event or theatrical performance? Most of us have. At some time have you been sitting there when someone else starts applauding or gets up to give a standing ovation? Ever noticed what happens when people do this? The people around them start to join in. Often reluctantly at first, […]
Spare Parts Inventory Management – It’s All About Process!
Spare parts inventory management has a lot in common with sports. For example, in professional sport these days it is not unusual to hear players and coaches talking about process. They talk about focusing on the process and following the process. Rarely do they talk about scoring a goal, a touchdown, a home run, a […]
Inventory Myth #5: Putting Items Into Spare Parts Inventory Saves Money
Adding an item to spare parts inventory is sometimes seen as way of spreading the cost of the item so that the original purchaser can get a lower charge to their budget. This is particularly the case with project and engineering items that have a minimum order quantity. This is similar to Myth#1: Economic Quantities […]
Inventory Myth #4: Inventory Software Will Solve the Problem
Almost everybody realizes that inventory software alone does not provide a solution to problems. Yet many companies, when faced with an inventory issue, see the need for a new inventory software solution as being a key requisite. Data availability and visibility is a key requirement of inventory reduction but software is only a tool and, […]
Inventory Myth #3: Consignment Stock Must Cost More
This myth probably adds more to the investment in inventory than any other. The opportunities for consignment stock are many and are largely ignored because of the belief that it costs more. Firstly, arranging to pay for items only at the time they are used, issued or sold is referred to as consignment stocking. In […]
Inventory Myth #2 – Inventory Risk Must be Re-evaluated to Reduce Inventory
Reducing holding quantities in inventory is often seen as requiring a corresponding increase with inventory risk. This might be the risk of extended downtime in manufacturing or the risk of lost sales in wholesale/retail. However, this is not true. For this to be true you must believe that the existing holdings are as lean as they […]
Inventory Myth #1 – An Economic Order Quantity Saves Money
In inventory management items often get ordered in an ‘economic’ order quantity so that the cost per item is at a minimum. This is seen to be economic because the subsequent issue cost of the item is reduced and the business, operational or project budget therefore records a lower cost. The term ‘economic order quantity’ […]