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Inventory Management

  • Cycle Counting Is Not a Guessing Game

    • Randall Schaefer
    May/June 2017
    Throughout the years, I have seen countless companies doing what they call “cycle counting,” which, in reality, is no such thing. These situations often result from managers who are unwilling to invest in a true cycle counting program. They seem to understand the cost of cycle counting but fail to appreciate the value of accurate inventory records. The subsequent poseur systems these managers create are so concerned with limiting costs that, when errors are ultimately uncovered, no money is allocated to address the root causes.......Read More
  • Hiring Advice You Can Take to the Bank

    • Randall Schaefer
    March/April 2017
    Years of consulting have taught me that the most perilous time for a small company is when it has grown to a point where it can no longer be managed informally. The founder of the business realizes that it is impossible to keep up with everything without some kind of help but has qualms about suddenly having to share decision-making responsibility.......Read More
  • Managing a Rising Tide of SKUs

    • Jonathan Thatcher
    March/April 2017
    SKUs seem to drench today’s supply chains with numerical complexity. In anecdotal research about SKU growth, one professional told me, “Almost half of our current SKUs did not exist 36 months ago.” This situation points to a few possible scenarios.......Read More
  • Wise Managers Keep Teams on the Right Turf

    • Randall Schaefer
    January/February 2017
    Sometimes very successful managers grow to believe that they are invincible. Such was the case with the new general manager of food producer ABC Company. At ABC Company, products had to stay frozen until people were ready to consume them. But the business had a small freezer that could only hold a few hours' worth of production. The good news was that the firm enjoyed a long-standing relationship with XYZ Company, which would haul away food production every few hours and distribute it via a network of refrigerated trucks and warehouses. For many years, this resulted in mutual profitably.......Read More
  • 10 Retail Replenishment Musts

    • Wambui N. Gathu
    January/February 2017
    Replenishment managers are responsible for ensuring that items are replaced the moment they leave shelves—whether they have been purchased by an end customer or removed by a retail professional because of damage or age. At the heart of this effort is inventory management, as replenishment managers walk that very thin and precarious line between stockout and oversupply.......Read More
  • Reinforcing Productivity in the Steel Industry

    • Wes Wells
    • Mike Toombs
    • Frank Roberto
    • Demetri Michaelides
    • Brad Kern
    • Pat Farragher
    • Mandyam M. Srinivasan
    January/February 2017
    The steel industry encompasses both the producers that melt and form steel and the processors that add value by conditioning steel for downstream customers. As a result, trends and shifts in the steel industry significantly influence material costs for automotive, construction, consumer appliance, energy, heavy machinery, and many other sectors.......Read More
  • Push, Pull, or Both?

    A combined approach to replenishment planning
    • Ron Crabtree
    November/December 2016
    Lean purists insist that it’s possible to manage any kind of inventory with some form of a pull system, which uses consumption-based triggers for replenishment. Alternatively, the material requirements planning and sales and operations planning folks typically prefer the zero-inventory benefits offered by a more traditional method involving replenishment that is triggered by planned orders only. As is so often the case, the truth lies somewhere in between: Certain operations do lend themselves to pull, while others are better managed with a push approach. ......Read More
  • Cycle Counting by the Probabilities

    Why the best systems weigh the inventory-variance odds
    • David Ross
    September/October 2016
    The most effective cycle counting programs reflect the realities of managing inventory in a dynamic environment. Within successful frameworks such as these, inventory managers are able to reach their inventory accuracy goals and balance the cost of cycle counting with the cost of analyzing variance causes and maintaining accuracy controls. Unfortunately, many programs suffer from ambiguity and imprecision related to the mechanics of assembling the cycle counting system. Furthermore, too many inventory managers struggle to determine the optimum cycle for item review, how many items to count, and how to use cycle counting results to continuously improve record accuracy.......Read More
  • Don’t Alienate Your Inventory Managers

    Intelligent life forms put turnover responsibility in its proper space
    • Randall Schaefer
    • Deb Smith
    September/October 2016
    Inventory turnover is a powerful marker. It communicates a company’s inventory management values, compares one business’s inventory velocity to that of similar firms, measures internal trends, and sets the desired standard for group and individual goal attainment.......Read More
  • Achieving Inventory Nirvana

    Get there by analyzing turns levels in context
    • Dave Turbide
    July/August 2016
    Do you know the current inventory turns measurement for your company? Do you have a goal for improving that performance? These are important questions for any company that has inventory.......Read More
  • Amplified Availability

    Spare parts inventory simulations hone network operations
    • Margaret S. Wise
    • David K. Peterson
    • Vitali Volovoi
    July/August 2016
    Today’s communication networks, air traffic control systems, national electrical grids, unmanned aircraft systems, and numerous other industries depend on complex systems or systems of systems—that require a delicate balance of component functionalities to achieve a greater common objective. It makes sense that these highly engineered and intricate tools dictate a correspondingly sophisticated level of support.......Read More
  • Powering Your SKUs with Data

    Automated statistical analysis drives inventory management efforts
    • Thomas R. Willemain
    July/August 2016
    Supply chain and operations management professionals recognize the importance of inventory management to both customer satisfaction and cost control. They also understand the inherent tension between the goals of customer satisfaction and cost control: In short, doing better on one puts a strain on the other. Easing this tension relies on finding the optimal balance point where customer service goals can be met with the lowest possible inventory investment.......Read More
  • Got Holes in Your Books?

    Don’t be blind to purchase price variance mischief
    • Deb Smith
    • Randall Schaefer
    July/August 2016
    Metrics such as inventory turns, on-time shipments, production efficiency, and the like are woven into the fabric of most manufacturing operations in order to gain control over production and costs. But each has the potential to be subverted for personal advantage. The most-often-abused metric is purchase price variance (PPV). ......Read More
  • Get Repair Parts Right

    Military Inventory-Planning Model Offers Universal Lessons
    • Michael Brackney
    • Steven Hurt
    May/June 2016
    When a new weapon system is introduced, program managers aim to implement a system-maintenance model that will increase performance, reduce costs, provide timely execution and responsive service, and facilitate sustainable supply chain management. One way they work to achieve these objectives is through an interim period of support from the system’s prime contractor, who almost certainly has the most intimate knowledge of the weapon system and its subsystems.......Read More
  • On-the-Mark Innovations

    RFID targets superior work-in-process, inventory, and quality controls
    • Elizabeth Rennie
    January/February 2016
    At American Woodmark Corporation, kitchen and bathroom cabinets are built to order using more than 500 product lines and while holding no finished goods inventory. The build process on an individual project starts only when an order is placed and processed, and each kitchen or bathroom cabinet is manufactured in sequence for delivery to the customer’s home. ......Read More
  • New-Fashioned MRP

    Incorporating lean features may bring about success
    • Dave Turbide
    July/August 2015
    In the long-running debate about push versus pull in planning and management, the two sides typically are exemplified by material requirements planning (MRP) on the push side and lean on the pull. The basic arguments are as follows.......Read More
  • Spare Parts Strengthen the Whole

    How to optimize this essential inventory without hurting service levels
    • Shawn Tay
    • Jozo Acksteiner
    May/June 2015
    It’s crucial for spare parts supply chains to have the necessary inventory at the right time and right place to meet customer service performance expectations. Inventory reduction initiatives therefore typically are considered off-limits in the after-sale-support supply chain. However, the following strategies make it possible to identify opportunities for optimization, significantly reduce inventory, and maintain service levels.......Read More
  • Buyer Aware

    Expert purchasing professionals earn recognition
    • Mark S. Miller
    May/June 2015
    Most company leaders believe purchasing’s primary objective to be cost reduction. Some buyers assume that getting low prices from their suppliers is the only way to achieve this goal. However, there are five other important aspects of a purchaser’s job that can significantly affect the bottom line.......Read More
  • Reconsidering Inventory Rationale

    New ways to reduce stock and save
    • Dave Turbide
    May/June 2015
    The main reason for keeping inventory is to save time; that is, it enables a business to provide products or parts in less time than it takes to make or buy them. The technical term for that is decoupling—defined in the APICS Dictionary as “creating independence between supply and use of material.”......Read More
  • The Agile Supply Chain

    Responding to demand and variability yields real results
    • Simon Eagle
    • John Earley
    March/April 2015
    The theories behind physics and mathematics, tested over years of practice, form the foundation of supply chain and operations management. But sometimes even the basic principles are lost in the day-to-day realities of running a business.......Read More