Thursday, August 21, 2008

Effective inventory management again

Lean manufacturing is helping producers throughout the world reduce inventories, lower labor costs, and increase their overall efficiencies. The same concepts embraced by lean manufacturing practitioners can help distributors achieve the goal of effective inventory management:
"Effective inventory management allows an organization to meet or exceed customers' expectations of product availability with the amount of each item that will maximize net profits or minimize costs."
There is a common philosophy that states, "The definition of insanity is repeatedly doing the same procedure, the same way, expecting different results." Are there re-occurring problems in your warehouse? Is there an easy to record damaged or stock inventory that for some reason cannot be used? This material includes:

* Damaged material found in the warehouse.
* Unintentional scrap created when a mistake was made in filling an order.
* "Drops" or quantities of a product that are too small to be sold or used.

In many organizations, damaged or unusable inventory is hidden. Maybe it is thrown in a scrap pile or discarded. But the best-run organizations encourage or (better yet) insist that employees record these "unquality events." Recorded events are analyzed to determine if polices or procedures can be changed to prevent the same mistakes from occurring again in the future.

1 comment:

Jamie said...

The transactions made should be recorded, because each event that happens in a warehouse can be used as a gauge for further improvement. These improvements could reduce the amount of damages found in an inventory, and can even speed up the process.

Jamie Shellman