Transforming inventory into a competitive advantage: best practices and productivity tools.

Author:McKay, Kaye Cee
Position:PROFESSIONAL DEVELOPMENT
 
FREE EXCERPT

There is no question that Inventory Management plays an essential role in a company's success, not to mention its impact on profit margins. After all, inventories either support our plans or they are a result of them. The question is, do WE manage our inventory, or does IT manage US?

LEARNING OBJECTIVES:

* Transform your inventory from a liability into a secret weapon that gives you a competitive advantage.

* Identify good trends and best practices.

* How to determine cost and investment justification.

To get started, let's do a quick temperature check:

** Do you have obsolescence on your shelves for more than 18 months?

** Are you constantly expediting (both to and from the plant)?

** Do you conduct physical inventory, cycle counting, or all of the above?

** Has your company gone through the annual inventory reduction program? (Reduce--reduce--reduce)

** Do you know which inventories to reduce, and what it's REALLY costing you?

These are all symptoms of an inventory program in dire need of overhaul, so let's start with the obvious--accurate records. The first step must be to build confidence in your overall inventory records. One popular method is through some sort of audit program, usually a yearly/monthly physical inventory or cycle count process. But what is the real goal? Now let's be honest with ourselves, inventory is an asset on the financial statement, and management (finance in particular) wants to ensure that their inventory dollars are valid and true. MRP, on the other hand, doesn't give a hoot how much the part cost, it only cares whether you have it or not. This "Catch 22" has sabotaged more than one unwary victim.

The best way to satisfy BOTH worlds is through an effective cycle count program. Everyone knows (at least on paper), that the true purpose of cycle counting is to find and eliminate the problem that created the error in the first place, a process called "root cause analysis."

Another area of concern has been that of data integrity, or introducing data entry errors. The good news is that thanks to bar coding, this issue is now almost non-existent. Real time production and inventory reporting has become a necessity in today's world of e-Business, Lean Manufacturing, and Six Sigma.

BAR CODING

Implementing an Automated Data Capture (ADC) solution provides your enterprise an opportunity to redesign inventory and production reporting processes to become leaner and more agile.

Barcodes have infiltrated every aspect of our lives. You'll find them in grocery stores, libraries, hospitals, farms, even in your own home. Think of barcodes as a way to replace keyboard data entry. Barcode solutions reduce inefficiencies and improve a company's productivity, thereby growing their bottom...

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