| The truth about the inventory |
|
|
 Why people underevaluate accuracy – and what they should do to change that
For the past 30 years inventory control is still the number one concern. It can be a real issue even for those people who have „mastered” enterprise resource planning (ERP) and moved on to supply chain management (SCM), advanced planning and scheduling (APS), lean manufacturing and other sophisticated pursuits.
Because it is so monotonous, people tend to take to ligtly the importance of good inventory records and procedures. Furthermore, operations management professionals find it boring and tedious to maintain the discipline necessary to keep inventory in control. But it is essential that they do so.
Despite the popularity of SCM , the excitement of APS or the allure of lean manufacturing, shortages continue to bring even the best-planned, best-executed program to a screeching halt. In truth, because all of these efforts aim to reduce inventory, save money and increase agility, it is even more important to precisely track the inventory you do have. There is little or no room for error when you’re „lean and mean”
What can help?
Automation may land a hand. Many companies use data collection equipment – primarly bar code-based systems – to help users quickly and accurately capture inventory consumption and movement. And there’s a double playback here because these systems also save time and effort. They are not a magic cure-all, however. Someone still has to scan the transactions and be regimented enough to report all activity when and where it occurs.
Automation also causes problems. Many professionals, in their efforts to reduce transactions and streamline processes, take short-cuts that are detrimental to inventory accuracy. The biggest offender here is backflushing. According to the APICS Dictionary, backflushing is „a method of inventory bookkeeping where the book (computer) inventory of components is automatically reduced by the computer after completion of activity on the component’s upper-level parent item based on what should have been used as specified on the bill of material (BOM) and allocation records. This approach has the disadvantage of a built-in differential between the book record and what is phisically in stock.”
Any BOM errors will generate erroneus inventory tranzactions, and few company decision makers put the necessary controls in place to audit the BOMs, identify problems and correct inventory balances. Items missing from the BOMs are equaly problematic, as unreported usage inevitably leads to shortages.
Fixing the system
Inventory reporting and accuracy don’t have to be impediments. It is really not that hard to get a handle on inventory and maintain good records; all it takes is an appreciation of inventory’s importance and the willingness to assign a resource to the problem. Cycle counting also fixes records, but that is not its primary purpose - rectifying the system is the real reason to cycle count.
The traditional benchmark for inventory accuracy for success with material requirements planning is 98%. That means that, for every 100 items counted, 98 will be correct; it does not mean that the total error (units or value) will be less that 2 %. This is a subtle difference, but an important one.
The goal of 98% accuracy also is quite appropriate for ERP, SCM, APS, lean manufacturing and any other tools or techniques you might be using. It is a resonable, achievable goal and will support the efficient and effective operation of your business.
Of course, there are exceptions and interpretations that must be made based on the materials, products, measurements and velocity that make these general rules subject to adaptation for your specific situation.
The important thing is to make sure reports on inventory movement are as accurate as humanly possible without causing an undue burden on the people handling and using the inventory. It’s essential to know what you have; but it’s also important to know exactly where it is.
|
|
Detalii articol
Articol disponibil in limbile: RO, EN
Data adaugarii: 20 Jan 2009
Alte articole
|
