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concerned about nickel-and-dime accuracy
issues? Here’s what’s at stake, and it just
might have a bearing on the story DuPont
has to tell over the long haul.
Start with how actuals
short of what the systems
tell us devalue and erode
the quality of desirable
sales volumes. If we cannot always—100 percent
of the time—satisfy a customer order, our odds of
retaining the customer,
let alone growing business
with him or her, plummet.
And forget about testimonials and referrals. Don’t forget that there is no bottom
line without a top line. This is true in
both the business-to-business (B2B) and
business-to-consumer (B2C) worlds. Sales
folks don’t always appreciate profit when
they are compensated on the gross, but this
is one time we must listen to them.
Continue with operating costs and the
effectiveness of staff—pick/pack/ship personnel, planners, analysts, trainers, supervisors, customer service reps, process
designers, and others. In our never-ending
quest to do more with less, those who have
not mastered the inventory visibility and
accuracy challenges will be spending precious resources on things that should never
have happened in the first place.
Leaders will be spending their human
capital on making customers, suppliers,
and shareholders ecstatic. Guess who wins
that race? Look, all the gee-whiz technology
in the universe will not overcome inattention to the basics. Mastering the people,
process, and technology components of the
equation will beat every time working like a
dog on the wrong things.
Add to that the explosion of mobile
technology in the hands of both business customers and consumers. And then
there’s the scramble to be omnichannel (or
multichannel, at least), with systems, asset,
people, visibility, and transparency challenges, and accuracy at an exquisite level
of detail rises, like cream on old-fashioned
milk, to the top (or top of mind) for many.
What to do? How to size and quantify, and
prioritize the issue(s)? Which path to follow to deal with the inventory and accuracy
questions and impacts?
tinues to be—marvelously effective in maintaining accuracy at the
stock-keeping unit (SKU)/location
level in facilities in relatively real-enough time. In short, rigorous
attention to process and detail can
apparently work.
The general cycle counting
approach is to physically seg-
ment a facility and cycle count/
adjust inventory by location on
some schedule that makes correc-
tions relatively inconsequential.
Furthermore, when an order pick-
er finds an empty location while
filling orders, the discrepancy is
immediately corrected. In aggres-
sive and progressive organizations,
SWAT teams are assigned to iden-
tify and correct process weaknesses
that result in identified cycle count
adjustments. Practitioners include
leading lights in the fast-moving
consumer goods (FMCG) and
retailing sectors as well as smaller
players in many industry verticals.
To the dismay of some public
accountants, strong cycle count
programs in DCs have eliminated
the hallowed physi-
cal inventory exercise
as part of the annual
audit process. But we
are still at a point of
not comprehending
all inventories as part
of our planning for
effective asset invest-
ment, for dynamite
supply chain part-
nering, and for accuracy in support
of our performance objectives.
SO WHAT DIFFERENCE DOES
THIS MAKE?
If the big pieces of inventory,
whether or not accurate, are the
day-shift drivers of performance,
of asset investment, and possibly of
outsourcing decisions, why are we
b
as
ict
ra
i
n
i
n
g
