Term
| Why Is Inventory An Issue? |
|
Definition
-It consumes cash, and depresses cash flow, a factor of great concern to the security analysts evaluating the firm’s stock.
-It also consumes expense dollars in the form of inventory holding cost, as well as generates inefficiencies in trying to operate very full warehouses.
It will eventually create a need for additional warehouse space
And finally, inventory is a crutch that covers up process inefficiencies.
Many firms look at inventory as a surrogate for how efficiently the overall supply chain is functioning. |
|
|
Term
|
Definition
Maximize
Customer
Service
Minimize
Operating
Costs
Minimize
Inventory |
|
|
Term
| Trends: Are Inventory Levels Getting Larger or Smaller |
|
Definition
For the first time in 20 years, inventory in industry in general increased in 2006. Why?
JIT deliveries and milk runs are beginning to reduce.
Fuel may triple in the next ten years….$9.00 by 2017
Outsourcing is a huge trend |
|
|
Term
| What Is Driving the Inventory Trend? (Four Drivers) |
|
Definition
| service, time, uncertainty, economics |
|
|
Term
| What Specifically Drives Inventory In Your Business Unit? |
|
Definition
Customer response requirements?
Quarter end spikes?
Too many SKU’s?
Too many warehouses?
Forecast error?
Too much excess and obsolete?
Long replenishment cycle times?
Locally
Globally |
|
|
Term
| The Latest Thing in Inventory Management: Multi-Echelon Inventory Optimization |
|
Definition
Multi-echelon:
Suppliers
Company material warehouse
Factory
DC
Customer
All carry inventory
Where is the best place to hold inventory….where is the best place to reduce it?
Consider cost of inventory at each stage
If there is a high degree of variability, MEIO is worth doing |
|
|
Term
| What Should Be The Strategy For Positioning Individual SKU’s In the Network |
|
Definition
Not all SKU’s should be stored everywhere
Small volume SKU’s might be held backward if lead time is acceptable
Always in Stock..…. Or build to order |
|
|
Term
| Why Do Projects Fail To Meet Expectations? |
|
Definition
Failure to identify the root cause -5 y’s
Scope expansion
Weak quantification of goals and benefits
Unclear project organization
Undisciplined approach to monitoring and controlling the project
Lack of risk management
Ineffective project leadership
Weak change management |
|
|
Term
|
Definition
|
|
Term
| Working definition: Inventory plus receivables minus payables |
|
Definition
|
|
Term
| The Three Deadly Sins of Systems Implementation |
|
Definition
Inappropriate Use of Beta Technology
Fast follower or innovator?
What is the culture of the organization?
Indefinite budget and schedule?
If you get ahead, can you stay ahead?
From the bleeding edge to the leading edge.
It really is rocket science!
There is nothing worse than a beta surprise
Launch-and-leave vs. focus-and-complete.
Are claims of implementation true? |
|
|
Term
| The Three Deadly Sins of Implementation |
|
Definition
Not realizing that people issues are tougher than
technical issues
Technical arrogance: Functionality not matching real needs
Sustaining change harder than the initial implementation
User unfriendliness
Inadequate support
Letting IT lead the implementation, not the process owners |
|
|
Term
| The Three Deadly Sins of Implementation |
|
Definition
No clear business case: Technology for the sake
of technology
Cost and benefit compared to what?
Benefits not quantified equal worthless benefits
Eliminate before you automate |
|
|
Term
| Questions to Ask Regarding New Supply Chain Technology |
|
Definition
Who else has implemented this technology, and have you spoken with them?
Are you implementing a change management communication plan and is it tailored to the individuals critical to this effort?
Will this make line jobs easier or more complex?
Do you have a plan for sustaining the change once it is made? |
|
|
Term
| Advanced planning & scheduling systems |
|
Definition
How much to make to maintain the proper level of safety stock
Where to place the inventory in the network
Maintaining priorities in shortage situations |
|
|
Term
|
Definition
Constraint management
Optimization
Available-to-promise capability
Real-time planning |
|
|
