Subsequent building layout then considers the physical
and movement characteristics of the pro forma inventory
to prepare high-level layouts and flows for products that
are floor stacked, in pallet racks of various types, in case
racks, and in shelving, for example. Preliminary slotting
(discrete location), based on future expectations extrapolated from historical data, defines the go-live facility/inven-tory profile.
THE DEVIL AND THE DETAILS
Subsequent planning is then based on operating experience
and typically tweaks the initial set as a result of product and
order profile changes, customer gains and losses, demand
shifts, and technology changes. Changes in sources and
suppliers, as well as in their capabilities, can affect both necessary inventory holdings and the parameters of replenishment order cycles and quantities.
This is where we deal with the nitty-gritty of reorder
points, economic order quantities, replenishment cycle
times, risk periods, mean absolute deviations, safety stock,
forecasts, seasonality, and lumpy demand.
There are some basics, though, that cannot be ignored.
Inventory-related transactions must be near-perfectly executed, with extreme discipline and total accuracy.
Anything short of that begins to erode the quality of the
data that is supposed to define inventories, leading in turn
to genuine risks in supply chain performance and customer satisfaction.
At core, unless execution is striving for perfection and
stock-level records are absolutely accurate, both inventory
planning and inventory control are somewhat abstract.
Abstraction was good for Picasso, not so much for consistently creating perfect orders for customers.
When errors are detected, it is not enough to correct
them. That might satisfy the accountants, but systemic
problems demand systemic solutions. So, immediate action
by a highly capable internal SWAT team, using the root
cause analysis and problem-solving techniques that have
been standards for decades, is definitely called for. Beyond a
team intervention, fixes need to contain mechanisms to virtually assure accuracy, such as scans, electronic confirmation, check digits, and reconciliation processes.
It’s all about flawless execution, whatever it takes.
Putaway in predetermined locations, count verification in
both putaway and picking. SKU number validation. Near-immediate dock-to-stock performance and system entry.
Systems and technology are big enablers, but, absent up-to-date tools, processes must make up for their lack.
A FINAL SHOT
In short, don’t worry, be happy, mon. Differences and distinctions between inventory management and inventory
control are artificial contrivances, and if pursued, can take
your eye away from the ball.
Taking care of business in accuracy and discipline in all
things related to inventory will put you on the road to effectively managing and controlling. ;
Art van Bodegraven, practice leader at S4 Consulting, may be reached at (614)
336-0346 or avan@columbus.rr.com. You can read his blog at http://blogs.dcve-locity.com/the_art_of_art/. Kenneth B. Ackerman, president of The Ackerman
Company, can be reached at (614) 488-3165 or ken@warehousing-forum.com.
