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Inventory Process Optimization Knowledge Base |
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This page provides access to articles, pod casts, books and audio CDs |
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'The difference with successful businesses is both their access to knowledge and their willingness to use it' Phillip Slater |
Articles Pod Casts Books Audio CDs
NEW
When is Critical Really Critical? Engineers will happily (well, not happily) review items that are not classified as critical but which actually are critical. Yet they will shy away from reviewing items that are officially defined as critical. In this case any review is, therefore, driven by the classification rather than the opportunity or cost benefit. Nobody would use this approach in reviewing any other capital investment. Read more...
The activity of changing the way a business is managed, of course, involves optimization. Optimization is what managers do; optimization equals solving problems by trading off choices to achieve the best outcome. In this respect it is a key means for companies to improve their operations. But optimization is all about understanding constraints. To solve a problem you must understand the constraints. Read more...
Inventory Articles
Why MRO Inventory Optimization Doesn't Optimize Part 1 So, you have finally got hold of that software you have been looking for. The boss has been on your back about inventory and wants your assurance on availability while also reducing the cash investment. You researched the market and decided on a program of inventory optimization. Optimization, surely that is what you need, after all optimization is the ultimate outcome, is it not? Optimization means that everything is working at maximum efficiency, right? Wrong. Read more...
Why MRO Inventory Optimization Doesn't Optimize Part 2 In Part 1 we identified that what is generally referred to as inventory optimization really doesn’t optimize inventory. Before identifying what does truly optimize we need to first understand the short falls in the process. Read more...
Why MRO Inventory Optimization Doesn't Optimize Part 3 To truly optimize inventory a new process is required and the suggested process is known as the Inventory Cash ReleaseTM Process. The first step in applying this process is to focus on the SKUs that will have a real impact on the inventory value, not the long tail of inventory items that hold little dollar value. This is an application of the Pareto Principle. The next step is to apply the ‘7 Actions for Inventory Reduction’ – and there are only 7 actions! Now, in Part 3, we discuss steps 3 and 4. Read more...
There is an old saying in business that ‘Cash is King’. Inventory, no matter what type, ties up cash and diverts it from other uses. Therefore the aim of inventory management should be to minimize the inventory investment for a particular customer service level. The approach taken should ensure that the target level of service is met while also minimising the cash investment. Read more...
Inventory Management - One Size Does Not Fit All If there is one great myth in inventory management it is that one single technique will solve all inventory problems. Not that people believe that one technique will solve all problems in all situations but that in any given company one approach is all that is required to manage all inventory. For the inventory manager this is very attractive as it means that there is only one approach to manage. For the software vendor, consultant or advisor it means only one solution to sell. Read more...
World’s Best Practice Inventory Management In almost every endeavour it is difficult to determine what constitutes ‘best practice’. Businesses around the world spend millions of dollars on software and advisory services and often don’t know whether they are ‘best practice’ or just somewhere in the pack. Read more...
Why Your Current Approach To Inventory Management Is Not Best Practice And Is Costing You Money Inventory management is the combination of know-how, process, measures and reporting that together provide the opportunity for maximizing availability while minimizing cash investment. There are five reasons why your inventory management is not best practice and is costing you money. Read More...
Do you hold too much inventory? Check your stock turn ratio It is essential to measure the availability of stock, after all that is why the investment is made in the first place. However, measuring stock outs can be a limiting way to measure inventory as it only measures one dimension of inventory, that is, availability. Read more...
Better Practice Inventory Management People are always searching for ‘best practice’, somehow believing that there is a silver bullet solution that will cure their inventory problems. The problem, of course, is that what is best practice in one country/industry/business might not be best practice in another. In any case, the exalted ‘best’ practice might just be too much of a jump for many people to take or indeed may not be economically viable. Read more...
5 Myths of Inventory Reduction Inventory reduction has been a major focus of supply chain improvement for many years. However, all inventory reduction initiatives must confront and overcome a number of systemic beliefs if they are to be successful. These hurdles take the form of truisms that destroy your company's wealth. We call these truisms the '5 Myths of Inventory Reduction'. Read more...
The Importance of Day One Decisions For many companies their inventory really is the forgotten investment and this is especially the case with engineering inventory. These companies may expense their inventory or many not have in place any system to manage their inventory. In this case the issue is not ‘optimization’, these companies are faced with the challenge of setting up an inventory management system. Read more...
What is the difference between inventory management and inventory reduction? How does the different focus of inventory management and inventory reduction impact the outcome? These and other key questions are answered in a straight forward no BS manner. Read more...
Cost Reduction Articles
Why Cost Reduction Efforts Fail Every business is trying to improve profitability, after all this is why the business exists. To achieve this goal there are only two paths that can be taken – increase revenue or reduce costs. Read more...
Many organizations go down a path of operational improvement and find that either their improvement is slow and incremental or that they run out of ideas. There may be several reason for this, however, a major reason is likely to be the ‘mental models’ that they bring to their business improvement efforts. To achieve significant and sustainable improvements in business the people designing and driving the effort need to employ double loop thinking. Read more...
Apply the Fundamentals With Rigor Significant improvements can be achieved by applying known and proven management solutions with discipline. There is generally little or no need to ‘reinvent the wheel’ and without the discipline to follow through, half implemented solutions are unlikely to drive results. Read more...
10 Steps to a Lower Cost Business (Part 1 of 4) Laying the Foundation for a Lower Cost Business (Part 2 of 4) Optimizing Your Performance - 10 Steps to a Lower Cost Business (Part 3 of 4) Renewal and Development - 10 Steps to a Lower Cost Business (Part 4 of 4) This series of articles explains what you can do to achieve lower costs and operational excellence in your business. Click on individual links above.
Implementation Articles
The Process of Implementation (Part 1) Up until now you may have been involved in an interesting intellectual and analytical exercise. The development of an action plan has enabled you to crystallize your thoughts and put some substance around your ideas. However, all of that will count for little if you do not take the next step and implement. Read more...
The Process of Implementation (Part 2) Change management requires an understanding of the human issues faced by you and your team. That’s right, implementation is a human process not a scheduling processes. Planning and scheduling are tools that help manage the human process; they do not replace it. Read more...
Many professional golfers go on to develop successful and significant business interests. Greg Norman is a standout example of this. Many senior business leaders play golf at a high level. This link between success at golf and successful business may not be coincidental, the attributes required for both are very similar. Read more...
The following pod casts are taken from a series of interviews completed for Business Essentials in 2005/06/07
Inventory Pod Casts
The 5 Myths of Inventory Reduction Interview Phillip explains how looking at you inventory as an investment can create a different perspective and enable an effective inventory reduction. Often companies cannot make this change because they are held back by myths that prevent action. Click here to listen (Run time 6:13)
Cost Reduction and Continuous Improvement Podcasts
NEW Finding the Hidden Profit in Your Business (Run time 6:52)
The following three interviews explain our approach to continuous improvement. Stage 1 involves Laying the Foundation for Improvement. Stage 2 is to Optimize Performance Stage 3 is to work on Renewal and Development Click on the links below to listen
Part 1: Laying the Foundation (Run time 8:05) Part 2: Optimizing Performance (Run time 6:19) Part 3: Renewal and Development (Run time 5:30)
Smart Inventory Solutions: 7 Actions for MRO and Indirect Inventory Reduction US$39.95 At last... a manual about inventory reduction not just inventory management! Smart Inventory Solutions shows you, step-by-step, the process to follow, the mistakes to avoid, and a sure-fire approach that minimizes your workload. In fact, you'll learn how to generate better results from your reduced inventory. Read more>>>
A New Strategy For Continuous Improvement: 10 Steps for Lower Costs and Operational Excellence US$39.95 This book presents, step-by-step, a new ‘Operations Improvement Cycle’ that provides the benchmark, priority, and guidance which many see as missing in the old “Plan-Do-Check-Act” cycle. This is achieved through an easy to follow three-stage process involving 10 specific steps. Read more>>>
An Introduction to ICR® This CD contains an edited version of a live presentation given to students completing graduate studies in Reliability Engineering. The content is practical and relevant. In just 40 minutes you will get a complete introduction to Inventory Cash Release™! Read More >>>
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