Inventory Accuracy - Why is Inventory Accuracy so Important?
The goal is to highlight the importance of inventory accuracy for a manufacturing or distribution business that wants to be part of the competitive global supply chain networks. And, in addition to put forward some suggestions as to how the objective of 100% accurate real time inventory records can be achieved in the shortest possible time.
After reading this, I hope that you will be able to take away with you some practical suggestions and a methodology that you can use to start an implementation project in your own company.
It is all very well to learn about all the new techniques in optimising "this" or advanced planning "that" within our operations and joining global supplies chains. But without going back to basics and making sure that the inventory in our system is real time and virtually 100% accuracy, we are wasting our time. Inventory records need to be like your bank account, we need to accurately know what we have, and where it is, in real-time.
Inventory accuracy impacts on so many aspects of a successful supply chain company. Typical consequences of inaccurate inventory are: -
Lost sales and lost customers
Missed schedules
Late deliveries
High freight costs
Expediting
Shortages
Excesses
I usually suggest that somewhere in the order of 80% of the problems we experience daily can be traced back to the fact that our inventory records are not accurate. Solve this one problem and we can release value time for all those other continuous improvement projects that need our attention.
It is for this reason that I have put this paper together to try and help companies achieve their inventory accuracy objectives by adopting a simple methodology which is detailed below.
A Proven Methodology to Achieve Inventory Accuracy
Over many years I have presented Stores and Stock Control educational at many companies. When later visiting these companies, I have found that generally nothing has changed in the stores and all the lessons learned by the warehouse team have never been implemented. So, all the effort that the warehouse team put into their studies has resulted in no benefit to the company, or to its employees.
After some investigation into this situation, I concluded that the reason for this sorry situation was twofold: -
Firstly, the person responsible for the store within the organisation had not attended the course and therefore did not understand what the ‘now educated’ warehouse team were talking about.
And secondly, the warehouse team were not empowered to set up projects for themselves in order to improve the stores operation.
It was clear to me that if I continued during the same, I was also wasting my time in trying to impart knowledge which ultimately had little or no effect on the companies that were paying me to entertain their warehouse team for several hours a week.
So, some time ago I put together the following methodology that has certainly had more success, and a number of my client’s stores are now on their way to accurate, real time inventory records as their contribution to a successful ERP implementation in their companies.
Presented By
Ken Titmuss
CFPIM, CSCP, SCOR-P, CPF, CS&OP, PLS, CDDP, CSCA, CDDL, CLTD, DDPP, DDLP, AEF, CSSC, CPIA Chief Executive Officer at Kent Outsourcing Services
A successful career in supply chain necessitates a never-ending thirst for knowledge and the most up-to-date supply chain skills and knowledge. Even though continuing education and certification programs can take time and money, they help get your specialized knowledge or skills recognized.
https://www.vcare.international/certifications
When professionals have training that other professionals lack, it distinguishes them and sets them apart from the crowd. Certification and master classes show that the professionals are committed to learning, excelling, and using best practices.
https://www.vcare.international/mmc
Featured Certification Programs
Certified Stores and Stock Controller (CSSC)
Certified Production and Inventory Analyst (CPIA)
Featured Mini-Master Classes
Supply Chain Framework and Strategy
Collaboration among Sustainability, Procurement and Supply Chain
Implementing 3PL and 4PL Strategies in the Value Chain
Supply Chain Sustainability with Circularity to Drive Profitability
