The Daily EO: February 13th, 2013

If any of you reading this works in manufacturing, operations, or supply chain management, you’ll cringe when I tell you what I have been doing this week.


Financial institutions and accounting departments see them as necessary, but I see them as a source of stress, pain, sleepless nights, anxiety, and error.  Because you shut down production and count everything you own, it gets boring very fast.  And when you are counting a 40,000 square foot warehouse, it takes a very very long time.

The worst part is that inventories cause as many issues as they resolve.   The inherent issue of team members spending all day painfully counting and recording everything in a warehouse is fraught with errors.  Its manual, and its boring and it is endless.

And when they finally are done?  Then the recounts start.

Many organizations see inventory as a thing that can be controlled, that can be managed, but it truly is not.  Inventory is a symptom of how well you are running your business.  Forget “goal keeping” (delaying receiving transaction until after month/year end), forget manual manipulation.  You will be partially successful, but you will never achieve high inventory turns through force alone.

Worry about accurate transactions, strong contracts with your customers (detailing inventory management), align your supply base with the needs of your customer, improve reporting, reduce lead times, eliminate purchasing outside of your ERP system.

But I digress.

February 13th, 2013 Extra-Ordinary:  Physical Inventories.  The bane of any Materials Manager’s life.