Most of the time, a good lesson is just that tiny reward you get after a bad experience. You get on your bike; tires are low on air. You get a flat and crash. Annnnd…. you break a leg. Now you inflate your tires on the regular!
Or perhaps the financial department has claimed that your inventory value is incorrect. You have to deliver an order late due to inaccurate inventory data. Reputation takes a hit. Lesson learned, right?
You know what, though. This time, I’d rather focus on ways to spend the effort upfront to avoid those kinds of pitfalls.
Here are a few recommendations so that you get to win without broken bones:
1.- Set a cycle count schedule, acceptance criteria, and person responsible.
Of course a cycle count strategy is required. But chances are, you won’t get it right the first time. And even though you’re smart, you could still easily botch it the second go around if you don’t come into this with some strategic foresight. The most important aspect of maintaining religious cycle counts is ensuring there is someone accountable for them, and defining a schedule so that the person must make it happen. Many companies spend years trying to define a cycle count procedure. A procedure that, after its execution, will most likely be updated based on lessons learned. Our recommendation is to get the minimum requirements ironed out, and include the basic schedule, acceptance criteria, and person responsible. The rest will follow as you gain experience.
2.-Develop standards for your inventory catalogue.
A clean and standardized catalogue is indispensable. Without duplicate value problems and miscategorized items, users can quickly identify the right materials and avoid reporting issues. Standardizing data takes time upfront. But developing standards helps you set the ground rules and avoid entering additional bad data into your system. You will have everything set up to easily enrich your legacy data, and avoid that constant need for major data cleansing.
Generate a risk assessment. Identifying key risks helps you ensure actions are defined for controlling both causes and consequences of those risks. Basically, no one wants things to go bad, but there’s nothing better than knowing exactly how to react under bad situation
4.-Define your KPIs
First, define what kinds of data you need in order to efficiently manage your business. Then use that information to help you design a dashboard. Dashboards are like baby monitors – the machines along won’t keep your precious cargo safe, but they will free you up to do other things while keeping an eye out on your valuables. Dashboards help you identify any risks and act quickly, but the best part is that you get to sleep better. Though every industry has different KPIs, here are key metrics (relevant to systems, data, and process improvement) that we recommend all inventory managers track:
The actions above should be completed within a four-to-ten-week period. As you can see, these activities are more related to planning than they are to execution. These are foundation-type activities that will help you build a healthy and reliable inventory management practice, enabling improvement and disabling “firefighting” mode.