Today business technologies --like ERP
(Enterprise Resource Planning)emand you master the fundamentals of business if youe to have any
chance for successful implementation.
When I walk through a factory, one of the first things I notice is how clean
it isr isn. A clean factory indicates that at least one business fundamental
has been mastered: inventory control.
Of course, just having a clean, orderly factory doesn mean the company is
using technology well, but it is certainly a precursor and a decent indicator of
success. Conversely, a messy factory indicates a lack of controls and
disciplines that almost certainly predicts a less-than-effective ERP
implementation.
Big surprise! If you don have the disciplines and habits to keep inventory
orderly and under control, what are the chances that computer records are kept
accurately? After all, computers are just big calculators and they must have
accurate data in order to function properly.
And, even though different factories have different managers and business
issues, accurate inventory data is a common thread connecting those who are
successful.
Worried? Don be. Nearly everyone has expert inventory management
skills.
A Clean Slate
Let use an example that close to all of our hearts, so to speak: toilet
paper. The goal of toilet paper (TP) management in your home is the same as
inventory management in your business: You never want to run out!
As corny as this might be, think about it. TP doesn command the same
attention as bigger household budget items such as food or electricity. In fact,
it so cheap you could buy a whole year worth at one time, if you wanted to.
But you don because the storage and transportation issues would make that an
inefficient decision, not to mention a household nightmare.
Somehow you balance the frequency of the purchase, the quantity and storage
issues. This is what I mean by ˜expert inventory management?skills. This
everyday balancing act demonstrates that inventory management is more than
inventory control; it also inventory management. But you must have inventory
under control before you can manage it.
If my mother was alive today, she roll over in her grave if she knew how much
I emphasize cleanliness. Many business owners, under the guise of taying
modern,?buy fancy technology to solve problems rather than address the people
and culture of the organization. If the game were decided by technology alone,
then it would simply be a game of cost-of-capital! Obviously that is not the
case. So, before you try to buy your way out of poor business practices, get
your inventory under control.
Control is Key
One of the tricky things about inventory is how easily inventory slips from
being a valued production asset to becoming a nebulous insurance policy against
poor planning and sloppy execution. To really get your inventory under control
you need to maintaint a minimumhese four data elements on every item:
- Identification ?what is it? Make sure every item is
clearly identified, that labels are easy-to-read and unmistakable. You must
never doubt what the item is. It amazing how long and complex some
companies let their part numbers become under the guise of ntelligent?part
numbers. Even more amazing is how frequently this problem is olved?by
expensive bar coding.
- Location ?where is it? Do you have a warehouse or a
here?house? Clean aisles, one box open at a time, and standard storage
locations have become standards of good warehousing. There should never be
difficulty in accessing stored inventory. Of course, ideally, you would never
store any inventory; it would be kept at the point of use, right on the
production line where it needed. For example, where do you keep your TP? Right
at the point of use!
