Over the past year, we have covered a wide range of topics related to Inventory Management.
Here are the top 5 Clear Spider blog posts of 2018:
- What is Lean Inventory Management?
- Cycle Count Best Practices: The Top 5 Things You Should Be Doing
- 3 Ways IKEA Aces Inventory Management (And You Can Too)
- The Logistics of NAFTA: What Does It Mean for Supply Chain?
- Logistics: The Russia 2018 FIFA World Cup
What is Lean Inventory Management?
Inventory can be costly if it’s not moved quickly. Lean inventory management is eliminating waste from your inventory in the form of costs, time, and efforts required to manage it. Being too lean with your inventory can also be harmful to your business. It is important to find the right balance of inventory that should be kept compared to your supply and demand.
Some benefits to adopting a lean system of inventory management can be cost reduction, fulfillment time (point of sale to delivery), stock turnover, return on investment (ROI) and cash flow. Some strategies to consider when implementing a Lead Inventory Management system would be; inventory forecasting, implementing a vendor managed inventory (IVM), and collaborating with both suppliers and employees to use the information to set min, max, and re-order points.
Cycle Count Best Practices: The Top 5 Things You Should Be Doing
Cycle count is an audit process technique where a subcategory of stock in a specific location is counted on a specified day. This helps to ensure what your inventory system displays is accurate.
There are 5 habits you should adopt for your cycle counts.
1. You should be consistent and frequent, as this is key to your operation. You should aim to do cycle counts as often as possible with the available resources.
2. You should use ABC counting, where you split your inventory into 3 categories. This allows you to decide which groups should be counted when and how often.
3. Going mobile makes cycle counting easy by simply scanning and updating quantities from the palm of your hand.
4. Double checking the cycle count is important because human error is always possible. This allows you to catch the mistakes and fix it, which improves accuracy.
5. Consider your inventory by organizing your location to the best of your ability. Having items in the right place also helps to benefit your day-to-day activities and efficiency.
When it comes to cycle counts, the goal is accuracy and these 5 best practices will help you reach that goal.
3 Ways IKEA Aces Inventory Management (And You Can Too)
IKEA was founded in Sweden in 1943 and as of 2017, have 411 locations. They can be found in 49 countries and carry more than 9,500 products. This makes inventory management and coordination vital to their operation. IKEA uses a cost-per-touch, max/min replenishment, and high-flow/low-flow solution to assist in inventory management.
Cost-per-touch implies that the more hands that touch a product in the supply chain – results in a higher cost. IKEA uses their retail locations for warehousing which requires buyers to retrieve items themselves, reducing costs for the company and the consumer. IKEA has in-store logistics managers that use an inventory system to view their store’s inventory levels. By using this, it helps to maintain max/min levels and keep optimum stock ensuring an efficient flow of goods. High-flow facilities and low-flow warehouses keeps track of the SKUs that sell quickly and are easily accessible for self-service, or SKUs that don’t get as much movement. This helps control the cost-per-touch, as an employee does not need to move as many items, using labour effectively.
IKEA’s inventory management system pays off by reducing costs, aiding replenishment, and increasing efficiency.
The Logistics of NAFTA: What Does It Mean for Supply Chain?
The North American Free Trade Agreement (NAFTA) was established in 1994 to make it easier for the US, Canada, and Mexico to do business with each other. This has eliminated tariffs and reduced other barriers to trade. Some believe that there are more disadvantages than benefits. One of these critiques are that it eliminates manufacturing jobs in the US, but in reality, at most, 5% of US job losses was because of this. Revoking or altering NAFTA could have a large-scale impact on supply chain and logistics. The economies of the US, Canada, and Mexico are now interdependent and have deeply integrated supply chains.
For the US, one benefit is that NAFTA improved the efficiency and cost of goods. Many firms in the US rely on supply chain operations with supplies in Canada and Mexico in industries such as automotive, agriculture, and energy. By eliminating NAFTA or changing the policy, firms could see a return of tariffs and other logistical barriers to trade. Depending on your supply chain operations, the re-negotiations may have effects on your firm. It is important to stay informed and be ready for all possible outcomes.
NOTE: The US, Canada and Mexico have officially signed a new trade agreement known as (USMCA) and now must begin the difficult part of getting it ratified by all three Governments. The updated trade agreement will see changes for automakers, new labour and environmental standards, intellectual property protections and some digital trade provisions.
Logistics: The Russia 2018 FIFA World Cup
The FIFA World Cup is one of the most anticipated sporting events in the world. When you are the host country, there are many logistics to consider. Russia had many things to do to prepare for hundreds of thousands of people traveling to their country for the games. They spent over $13 billon USD on infrastructure, which included new hotels, airport terminals, and re-equipped hospitals.
Housing is considered one of the top priorities, resulting in Russia building over 100 new hotels, ensuring they had enough accommodations for fans. Transportation was essential because the games took place in multiple cities across Russia. Coordinators provided a FAN ID which afforded free public transit to all viewers attending events and free Wi-Fi was offered in every stadium. With events as big as the FIFA world cup, forecasting logistics are crucial.
This is our last post of 2018! With that being said, we want to wish everyone a Happy Holiday and a Happy New Year!
See you in 2019 with new content and insights about Inventory Management!