by Jon Schreibfeder | Sep 19, 2012 | Analysis
Last month we looked at how to calculate inventory turnover. Many companies view inventory turnover as their primary measurement of inventory performance. But should turnover be the only inventory metric analyzed on a regular basis? If a company enjoys high gross...
by Jon Schreibfeder | Sep 19, 2012 | Purchasing
In today’s economy we see many companies emphasizing “cash flow management” over profitability. That is, they are willing to sacrifice some profit dollars in order to invest smaller amounts in inventory. If you find yourself in this situation, I have...
by Jon Schreibfeder | Sep 19, 2012 | Replenishment Parameters
Safety stock provides protection against stock outs due to unexpected demand for a product or delays in receiving a replenishment shipment from a supplier. It is insurance – and like other types of insurance, it is an expense of doing business. Like many other types...
by Jon Schreibfeder | Sep 19, 2012 | Replenishment Parameters
Over the next few months, we will discuss setting meaningful replenishment parameters. Today’s article deals with the importance of setting accurate anticipated lead times. The anticipated lead time is the amount of time (usually expressed in days) we estimate...
by Jon Schreibfeder | Sep 19, 2012 | Stocking Decisions
Last month we discussed the first step in the 12-Step Program to Achieve Effective Inventory Management, ensuring that all material movement is properly recorded. Now we are ready to move onto step #2, developing an approved stock list for each of your stores or...
by Jon Schreibfeder | Sep 19, 2012 | General
A participant in one of our October workshops was frustrated. “Management wants me to reduce inventory by 25% and I have no idea how to do it.” I asked how they came up with this figure and he responded, “I don’t know.” Without direction...
by Jon Schreibfeder | Sep 19, 2012 | Replenishment Parameters
I received a call from a customer this week saying that the minimum quantities in his computer system were far too high. Joe explained, “We normally sell four pieces of product #A100 per month. The computer system has a minimum quantity set at eight pieces. If...
by Jon Schreibfeder | Sep 19, 2012 | General
In these current economic times, most companies are trying to find new ways to liquidate unneeded inventory. In the next two newsletters we are going to explore some effective ways to achieve this goal. Remember that inventory you buy is a “sunk” cost....
by Jon Schreibfeder | Sep 19, 2012 | General
In today’s economy it is critical to remove the “fat” from your warehouse. Every dollar in inventory must be working as hard as possible for you to achieve your inventory-related goals. One critical element is to ensure that your stock inventory...
by Jon Schreibfeder | Sep 19, 2012 | Analysis
In a quest to minimize your investment in inventory, the consistency of vendor lead times can have a major impact and deserves your examination. Consider the following situation. I was working with a customer a couple of months ago who had major problems with...
