Interestingly, though, in my work, the question that I am most often asked is, ‘what do I do with all of this excess inventory?’ My answer, of course, depends upon the nature of that inventory, what it is, how old it is etc. But obviously the best thing to do is create less of the inventory in the first place!

Some might think that this requires best practice and is therefore difficult to achieve but I would argue that this really is more achievable than people think. Putting in place the right processes, polices, measures and reporting in order to limit inventory purchases to those items that are most likely to be used/sold and in the right quantity, is as important or perhaps a more important task than clearing out the old stock. This can be achieved by understanding what works well for others rather than what is best practice. I think of this as better practice.

With that in mind I recently had the opportunity to interview more than 30 people, across a dozen companies, in all Australian states and New Zealand, who were all associated with inventory creation in one way or another. There were General Managers who make the occasional big decisions that create inventory. There were inventory managers who take the day-to-day actions. There were purchasing people who order the stuff and sales people who provide forecasts. Each of these people has a role to play in the creation of inventory but interestingly only the inventory managers acknowledged that role explicitly. The result of those interviews does not constitute best practice but I think that they give some insight into better practices.

These interviews were conducted on behalf of a client so I am unable to give you all of the detail or the quantitative results. But I do have permission to tell you what we deduced in a qualitative fashion.

During the interviews we identified the following similar practices that were consistent between the companies that performed well.

1. Inventory decisions (range and quantity) were made at a local level. The locals were considered best placed to understand local conditions and requirements and therefore better able to get the inventory mix right. They had a better handle on forecasting because they were closer to the customer or demand. Centralized systems often missed the subtle changes or inside knowledge that helped stop the ordering of items (for example) when usage had changed but had not yet been flagged in the system.

2. Requisition systems were used to order items through centralized purchasing. This approach creates efficiencies in procurement and provides greater control over terms of business and logistics. The purchasing people were concerned with all the purchasing issues not just the availability.

3. Inventory items and codes were created centrally. This was used as a means of controlling the SKU count. Companies that did not do this experienced the ‘death by a thousand cuts’ associated with managing a long tail of low value SKUs
   Metal Stamping Company Buys New Presses
   Component Engineers Inc. is proud to add three new power presses to the plant, taking the total in the facility to 38. One of the presses added is a Minster, 75-ton straight side, which is the third of its kind at the CEI facility. The other two presses are Minster 32-tons, also straight sided.The addition of these presses helps to expand CEI’s capacity. They will be used for small complex and progressive stampings, secondary and compound stampings, as well as value added tube operations.CEI has been a leader in the precision stamping industry for over 25 years, and services the medical, automotive, commercial hardware, electronics, and aerospace industries, among others. By incorporating a vast variety of capabilities, CEI a one-stop shop for a custom manufactured job.CEI’s precision metal stamping capabilities include progressive stamping power up to 300-tons and coining up to
   f the inventory in the first place!

   Some might think that this requires best practice and is therefore difficult to achieve but I would argue that this really is more achievable than people think. Putting in place the right processes, polices, measures and reporting in order to limit inventory purchases to those items that are most likely to be used/sold and in the right quantity, is as important or perhaps a more important task than clearing out the old stock. This can be achieved by understanding what works well for others rather than what is best practice. I think of this as better practice.

   With that in mind I recently had the opportunity to interview more than 30 people, across a dozen companies, in all Australian states and New Zealand, who were all associated with inventory creation in one way or another. There were General Managers who make the occasional big decisions that create inventory. There were inventory managers who take the day-to-day actions. There were purchasing people who order the stuff and sales people who provide forecasts. Each of these people has a role to play in the creation of inventory but interestingly only the inventory managers acknowledged that role explicitly. The result of those interviews does not constitute best practice but I think that they give some insight into better practices.

   These interviews were conducted on behalf of a client so I am unable to give you all of the detail or the quantitative results. But I do have permission to tell you what we deduced in a qualitative fashion.

   During the interviews we identified the following similar practices that were consistent between the companies that performed well.

   1. Inventory decisions (range and quantity) were made at a local level. The locals were considered best placed to understand local conditions and requirements and therefore better able to get the inventory mix right. They had a better handle on forecasting because they were closer to the customer or demand. Centralized systems often missed the subtle changes or inside knowledge that helped stop the ordering of items (for example) when usage had changed but had not yet been flagged in the system.

   2. Requisition systems were used to order items through centralized purchasing. This approach creates efficiencies in procurement and provides greater control over terms of business and logistics. The purchasing people were concerned with all the purchasing issues not just the availability.

   3. Inventory items and codes were created centrally. This was used as a means of controlling the SKU count. Companies that did not do this experienced the ‘death by a thousand cuts’ associated with managing a long tail of low value SKUs
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      , across a dozen companies, in all Australian states and New Zealand, who were all associated with inventory creation in one way or another. There were General Managers who make the occasional big decisions that create inventory. There were inventory managers who take the day-to-day actions. There were purchasing people who order the stuff and sales people who provide forecasts. Each of these people has a role to play in the creation of inventory but interestingly only the inventory managers acknowledged that role explicitly. The result of those interviews does not constitute best practice but I think that they give some insight into better practices.

      These interviews were conducted on behalf of a client so I am unable to give you all of the detail or the quantitative results. But I do have permission to tell you what we deduced in a qualitative fashion.

      During the interviews we identified the following similar practices that were consistent between the companies that performed well.

      1. Inventory decisions (range and quantity) were made at a local level. The locals were considered best placed to understand local conditions and requirements and therefore better able to get the inventory mix right. They had a better handle on forecasting because they were closer to the customer or demand. Centralized systems often missed the subtle changes or inside knowledge that helped stop the ordering of items (for example) when usage had changed but had not yet been flagged in the system.

      2. Requisition systems were used to order items through centralized purchasing. This approach creates efficiencies in procurement and provides greater control over terms of business and logistics. The purchasing people were concerned with all the purchasing issues not just the availability.

      3. Inventory items and codes were created centrally. This was used as a means of controlling the SKU count. Companies that did not do this experienced the ‘death by a thousand cuts’ associated with managing a long tail of low value SKUs
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         e conducted on behalf of a client so I am unable to give you all of the detail or the quantitative results. But I do have permission to tell you what we deduced in a qualitative fashion.

         During the interviews we identified the following similar practices that were consistent between the companies that performed well.

         1. Inventory decisions (range and quantity) were made at a local level. The locals were considered best placed to understand local conditions and requirements and therefore better able to get the inventory mix right. They had a better handle on forecasting because they were closer to the customer or demand. Centralized systems often missed the subtle changes or inside knowledge that helped stop the ordering of items (for example) when usage had changed but had not yet been flagged in the system.

         2. Requisition systems were used to order items through centralized purchasing. This approach creates efficiencies in procurement and provides greater control over terms of business and logistics. The purchasing people were concerned with all the purchasing issues not just the availability.

         3. Inventory items and codes were created centrally. This was used as a means of controlling the SKU count. Companies that did not do this experienced the ‘death by a thousand cuts’ associated with managing a long tail of low value SKUs
            Why Submitting Articles Will Increase Online Business
            Enjoying the rewards of an online business is not all a bed of roses. You need to take time to research and understand the best ways to promote your business.Just like traditional business you need to build a reputation, network and advertise. What makes it tough is as online business owners we need to understand how it all works without getting caught up in hype and scams. Remember there are plenty of people out there promising the world but delivering nothing leaving you with empty pockets and no income.So where do you start to get your business known? That is the six million dollar question. If you ask a web designer they will say submit to search engines - good but not the total answer, others will say traditional advertising - this is also good but also not a total answer. Ask a marketing professional and they will charge you a heap to give you a document of information that will t
            s or inside knowledge that helped stop the ordering of items (for example) when usage had changed but had not yet been flagged in the system.

         4. Requisition systems were used to order items through centralized purchasing. This approach creates efficiencies in procurement and provides greater control over terms of business and logistics. The purchasing people were concerned with all the purchasing issues not just the availability.

         5. Inventory items and codes were created centrally. This was used as a means of controlling the SKU count. Companies that did not do this experienced the ‘death by a thousand cuts’ associated with managing a long tail of low value SKUs

         6. The better companies had moved to central ordering after trying local ordering. They found that this change had a positive impact on their inventory investment. The point is that they tried it one way and made a change and that this experience was consistent.

         7. Inventory management systems and practices were standardized. Each location or department followed exactly the same process. They used the same rules for determining what they should and shouldn’t buy and had the same authorities, responsibilities and accountabilities at similar levels. Kind of like McDonald’s only not involving hamburgers! This didn’t remove individual decision making or initiative it just meant that the rules were consistent.

         8. Most of the better companies had an inventory process ‘champion’ to work on continuos improvement and maintaining standardization. This person did not manage the inventory or ‘own’ it any way. This person ‘owned’ the process. I liken this to having a Quality Manager; they don’t own the production just the process used to control quality. This was not necessarily a full time role

         9. Inventory was reported at a local level using local balance sheets. Local reporting and highlighting of inventory was seen as an important way to create visibility and therefore ownership.

         10. The better companies were quite aggressive in inventory management, setting and achieving aggressive targets rather than ‘achievable’ targets. The better companies did not just want to manage availability they saw managing the cash investment as equally important and therefore set targets aimed at minimizing the cash investment without jeopardizing availability.

         11. Internal interest charges were included in departmental P&L reports as a means of providing immediate feedback on the impact of additional inventory (these items were reversed before any corporate reporting). This helped make the cash investment important at the senior levels that had to report on their P&L Statement on a monthly basis. Companies that didn’t do this found that reporting a good profit was used to justify an over investment in inventory (that is an investment that did not really contribute to the profit). This approach forced them to mange both cash and profits.

         12. Slow stock was identified at a higher stock turn level in the aggressive companies than it was in the others. This was seen as a way of highlighting the approaching ‘cliff’ of obsolescence and was used as a way to force action before accounting rules required items to commenced being written down.

         13. Virtual warehousing was used to separate stock purchased for different purposes. This is where a different warehouse code might be