- Are you able to break down your operating inventory into the three major categories when reporting levels—safety, replenishment and excess or obsolete stock?
- Is your company using the most effective method to calculate your safety stock levels?
- Do you recalculate safety stock levels on a regular basis to ensure they are up to date?
- Who decides key inventory-related policy such as striking the right balance between customer service and cost-effective product inventory levels?
- Who determines the optimal frequency for producing or ordering products?
- How do you determine the frequency for ordering and inventory production if it’s not set solely by factories or the supply organization?
- Is the optimal order or production frequency calculated on a regular basis as part of a continuous improvement process?
- Do you have regular visibility into excess and obsolete stock, and is it linked to targeted action plans to sell off or reduce this inventory?
- Do you perform root-cause analyses on excess and obsolete stock and know how they are linked to action plans that curb more excesses from being created?
- Do you apply the above practices to all parts of your inventory (finished goods, raw material, works in process and spare parts) and in all organizational entities?
Source: Ten ways to improve inventory management by Ronald Fink, Pratap Mukharji, Sam Israelit, Francois Faelli, Thierry Catfolis, Raymond Tsang | Bain & Company, WSJ.com
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