by Jon Schreibfeder | Feb 10, 1999 | Analysis
I’m going to begin this article with two assumptions which should be true for all manufacturers (who maintain stock inventory), distributors, and retailers: You stock material to meet your customers’ expectations of product availability. You are in...
by Jon Schreibfeder | Feb 9, 1999 | Analysis
A common measurement of the performance of your stocked inventory is the customer service level. It measures how often you have the items you’ve committed to stock when your customers want them. The customer service level is calculated with this formula: # of...
by Jon Schreibfeder | Feb 8, 1999 | General
Doing one thing well often leads to doing other things well. This is true in many areas of business, including inventory management. Have you ever noticed that successful manufacturers and distributors have clean, organized warehouses? And companies in a perpetual...
by Jon Schreibfeder | Feb 7, 1999 | Warehousing
Most distributors realize the importance of inventory accuracy – that is, having the available quantity of an item in your computer agree with what is actually on the shelf in your warehouse. Management realizes the bad things that happen when inventory accuracy...
by Jon Schreibfeder | Feb 5, 1999 | Purchasing
Sometimes the cost of an item will be dependent on how much is purchased. For example, Foyt’s Racing Supplies offers the following discount schedule for the #AJ 3000 Brake Pads: Quantity Unit Cost Discount Net Unit Cost 100 10.00 5% 9.50 500 10.00 7.5%...
by Jon Schreibfeder | Feb 4, 1999 | Physical Inventory – Cycle Counting
A physical inventory is the process of manually counting all of the items in your warehouse(s). Most distributors conduct a physical inventory once a year. It is an expensive process that few employees enjoy. But, accurate balance information is necessary for both...
by Jon Schreibfeder | Feb 3, 1999 | Forecasting
A demand forecast (also referred to as a usage rate) is a prediction of the amount of each product that will be sold, transferred, used in an assembly, or otherwise consumed in the future. It’s easy to see that inaccurate forecasts can cause major problems for...
by Jon Schreibfeder | Feb 3, 1999 | General
Imagine one day picking up your local paper and finding that the front page story is about one of your largest customers filing bankruptcy. Overnight you go from a feeling of security and prosperity to one of fighting for survival. This very scenario recently happened...
by Jon Schreibfeder | Feb 2, 1999 | Purchasing
Many vendors offer to pay freight charges if an order exceeds a certain minimum requirement. Many buyers are “brainwashed” into thinking that they must always place an order that meets the free-freight minimum, even if it means bringing more inventory than...
by Jon Schreibfeder | Feb 2, 1999 | General
Through the end of the 1980’s, most software packages for distributors placed an emphasis on sales and accounting related modules. In the early 1990’s, many distributors recognized that they needed help controlling and managing their largest asset, inventory. In...
