Inventory management is a discipline primarily about specifying the shape and placement of stocked goods. It is required at different locations within a facility or within many locations of a supply network to precede the regular and planned course of production and stock of materials.
At a high level, a supply chain’s structure defines critical factors affecting optimal target inventory levels – factors such as replenishment lead time and variation, customer demand and variation, and replenishment frequency. Supply-chain structure is fundamental to optimal overall financial performance. Still, to achieve target service levels reliably with minimal inventory and expediting, we must…
When I was a child, I remember the prices on products at the store were merely stickers with a currency value on them. Sometimes, there were several stickers – one on top of the other – and you could see if the price had changed upwards or downwards.
Recently, whilst working with the Global Planning Team of a major oil company, we were asked, “What is the cost of complexity and what is the effective range on this cost?” At one level, the answer is easy; “It is the cost associated with having more than one customer and product. The more complex the supply chain,…
One of the primary objectives of Lean is to achieve smooth continuous flow of material through the process. If there are bottlenecks within your process, they can inhibit flow, cause inventories, and prevent throughput from matching customer demand (Takt). In order to make progress towards Lean goals, bottleneck resources must be identified, managed and improved. From a…
