Why do we care about inventory?
My view on inventory management
o Making the right amount of items at the right time
The MYTHS about inventory
Low inventory = Poor service
Good service = Fastest delivery
Many stocking locations = Good service
The FACTS about inventory
Minimal inventory designs are more responsive to customers.
Reliability to customers delivery dates it Is more valued than speed
Fewer locations result in improved reliability
Low inventory and excellent service go hand in hand
Inventory and service
Short cycle times, flexible manufacturing, responses suppliers and clear communications, gives you the ability to have low inventories and high customer service.
World-class organization’s view on inventory
Low inventory is compatible with high service and low cost.
However, must be the businesses top priority.
Many elements must be executed well.
There is a correlation between high service levels high working in inventory turns and low-cost.
The critical element is time
World-class corporations consider Service improvements, inventory improvements and cost reduction to be mutually supportive of one another.
A key ratio to always consider. P-time ratio: Is production/delivery.
The goal is to continually reduce production and delivery TIME.
Inventory management techniques
What are our objectives as inventory management professionals? Minimize the total cost of ordering, carrying inventory while maintaining and increasing customer service performance.
The challenge of all inventory management techniques
We are tasked with creating a world class factory or organization; responsive to customer demands, operating with fast cycle times, low inventories, and supplier partnerships.
We must Challenger ourselves to think outside of the box.
“Insanity is doing the same thing, over and over, but expecting different results.” Albert Einstein
We need to break the cycle of past bad inventory management techniques
How to break the entropy cycle