by Jon Schreibfeder | Oct 15, 2013 | Stocking Decisions
Remember that inventory you buy is a “sunk” cost. You’ve paid for it. No matter what it’s worth now, your money’s still gone. Compare it to shares of stock you may purchase in a company. The securities have “paper” value but no real monetary value until they are...
by Jon Schreibfeder | Sep 15, 2013 | Stocking Decisions
This month we continue our discussion of evaluating your inventory investment. The goal of effective inventory management is to “meet or exceed customers’ expectations of product availability with the amount of each item that will maximize your net profit or minimize...
by Jon Schreibfeder | Aug 15, 2013 | General
I literally grew up in a family-owned industrial distribution business. My dad (Norman) was a great guy and a fantastic salesman (in the best sense of the word). He was always in motion and wasn’t happy unless everyone else was as well. There was constant noise and...
by Jon Schreibfeder | Jul 15, 2013 | Analysis
In previous newsletter articles we have discussed the customer service level. This is a measurement of the number of line items on sales orders shipped complete in one shipment on or before the date the material was promised to the customer. The customer service...
by Jon Schreibfeder | May 15, 2013 | Forecasting
Most computer systems provide buyers with out of stock reports. These are listings of stocked products with no available inventory. Because of the stockout, sales orders cannot be filled and salespeople cannot provide the service their customers expect. Buyers must...
by Jon Schreibfeder | Mar 15, 2013 | Analysis
The phenomenon of “inventory creep”: a constant increase in inventory without a corresponding increase in sales. Management is often puzzled when this occurs, despite having implemented an expensive, state of the art inventory management system. The most common...
by Jon Schreibfeder | Mar 15, 2013 | Forecasting
Most computer ERP (enterprise resource planning) software packages replenish inventory with minimum and maximum quantities or reorder points and reorder quantities. The forecast, a prediction of what you are going to sell or use in the future, is an integral element...
by Jon Schreibfeder | Feb 15, 2013 | Analysis
I received an email from a customer this week asking how to handle a salesperson’s request to stock a product. This would be the only product this new customer would buy: Anticipated Annual Sales $1,888 Annual Cost of Goods Sold $1,411...
by Jon Schreibfeder | Jan 15, 2013 | Purchasing
One of our clients is continually overstocked. Management is frustrated that they are not achieving their return on investment goals. They couldn’t understand why, after working hard to establish replenishment parameters that would optimize their inventory...
by Jon Schreibfeder | Nov 14, 2012 | Physical Inventory – Cycle Counting
I recently visited the distribution center of a large national hard goods distributor. This company is experiencing a significant problem with excess inventory in both their distribution center and their 100 store locations. We have to eliminate this excess...
