To wrap up the series, one final root cause of why organizations carry excessive inventory is Capacity Constraints and/or Seasonality. Managing inventory so service is maintained through tight capacity windows is incredibly important. A capacity constraint should not be an acceptable reason for service issues in your business, at least not one that's plannable with effective forecasting like seasonality. There are times where customer order patterns do irrational things which cannot be planned,...
Lead times are a challenge that we all face. Some supply chains suffer more than others but there are challenges in all. This derives from many sources: Geographic distance between production, distribution, and customer Excessive distribution or production points Supplier lead time length Customer pressure for shorter lead times Lead times to secure enough labor or line time resources to manufacture the product Capacity constraint relief may require several weeks or months to improve without...
· 26. April 2019
Every company deals with performance challenges and volatility. It's the one thing that's universal to us all, mistakes occur. Performance is cannot be 100% expected without fail all the time. If you read this, every one of you are dealing with at least one of the following: Unreliable production lines/facilities Transportation reliability challenges Customer order volatility Supplier challenges on finished SKUs or materials for production Warehouse reliability Personnel or process...
· 17. April 2019
Consider the following conversation: Sales/Customer Services: Why were we short last week on item _______? Planner: Orders were above forecast? Sales/Customer Services: How do we prevent this cut in the future? Planner: I guess we just carry more inventory to prevent next time. Sales/Customer Services: Thanks. This conversation goes exactly this way at most of your companies. The 1st bolded statement could be replaced in any blog post in this series and the 2nd bolded statement makes me cringe....
· 14. April 2019
Inventory optimization and reduction is a business necessity, is not that hard, and will help your company achieve improved performance if done right. The first objective: convert apathy to awareness and action.
· 08. April 2019
Introducing a series on ways to improve inventory turns. Companies everywhere have working capital tied up in inventory which might be better served being invested elsewhere. Let's discuss ways to improve.