Taking a simple Sunday drive down a road through the countryside, there are many things you depend upon to get you where you’re going. Most are common to all drivers. You need good tires, windows, seats, perhaps an air conditioner, and certainly a solid body. These are the essentials that in various states of repair have little bearing on the efficient functions of the car by which it sustains forward motion. However, start talking about the engine these days and you’ll get an earful regarding notions such as fuel efficiency, pollution control efficiency, maintenance efficiency, and so forth. Less common from driver to driver, car to car, are the various types and conditions of car engines, but it is the engine upon which all drivers depend the greatest to get them where they are going. As opposed to seats and seat condition, a less efficient engine simply means a less efficient car.

In this same sense, manufacturers are very dependent upon each other to be efficient in their operations—your performance is often dependent upon the performance of your upstream suppliers, while downstream your customers depend on you for their own performance levels. It is a circuitous feeding chain that traditionally has relied up on the sustaining of on-hand inventories to keep ahead of demand. With the introduction of lean manufacturing came the elimination of large inventories and the need for greater (more…)

It’s a given that maintaining inventory is costly on many levels, the least of which is the notion of stagnant inventory and/or raw materials becoming obsolete before your very eyes. In working inventory control, there is often a fine line that marks the threshold between having too much on-hand inventory and not having enough to ensure on-time delivery. In the modern supply chain, planning for sourcing issues and automated purchasing puts manufacturers on better terms when it comes to real-time inventory management.

However, as lead-times become increasingly reduced and demand levels usually unpredictable from one month to the next, inventory management is integrally connected to the notion of profit margin. What is necessary is to begin thinking of the “inventory area” as a potential profit center itself—to optimize inventory so it works for you, and not against you.

Inventory optimization uses data that is connected to key interrelated factors that influence the efficient management of inventory. The point of inventory optimization is to (more…)

The greatest mysteries of the ancient world usually revolve around how something was made. The Pyramids of Egypt, Greek Parthenon, and Roman Colosseum are all immense structures that required organization and many associated industries for their completion. Chances are, though, the coordination and production requirements of these wonders of the world were not much different than what we expect today in modern manufacturing.

Then, as now, resource management included labor, materials, physical plant, and administration. The mystery, of course, lies in the question of how the sheer size of these projects and the resources they necessitated allowed for successful coordination. For example, the various data centers for the building of the Pyramids, like all other great ancient structures, were geographically dispersed with, of course, no form of immediate production communication available.

We also know that ancient productions were not lean operations, and the subsequent progression of manufacturing production technique moved very slowly over the centuries. The major change in production development from Dynastic Egypt to Depression America was in the capability of (more…)

What could be better than being just in time for somewhere you were scheduled to be or a task you had to do? That is to say, you were not too early on arrival, wasting valuable time standing around doing nothing. Nor were you too late to the task, not being able to complete on schedule that which you were asked to do.

In short, wouldn’t it be the best case scenario for you to produce the right task at precisely the right time to maximize both your time and productivity? This notion is the concept behind the philosophy of lean manufacturing referred to as “just-in-time”, or JIT production.

In JIT production, we are seeking to eliminate costs that add no value to the final product. It is certain that without critical thought applied to a manufacturing system as a whole, the potential for waste in process is heightened. These forms of waste can include (more…)

From the production of the smallest nut, to the development of massive rigging assemblies, all items and processes that go into the making of the part, piece, or assembly must be accounted for. Without this knowledge, margins are lost and profitability is a function of guesswork. In the past, the accounting of manpower, material, and machinery was the result of painstaking, though often erroneous, handwritten data in the form of charts and reports. The collection of this data would take days to complete and weeks to assess. In the age of massive batch (make-to-stock) inventory production, blunders in data tallies or the absence of complete information had only a rippling effect on what was largely the quantitative appreciation of manufacturing in the Industrial Revolution.

Today, however, with make-to-order and the job shop manufacturing environments, specialized and small batch production means more emphasis must be placed on margins—today, it is often quality over quantity. Quality control, in fact, is the name of the manufacturing game. For this reason, labor and resources must (more…)

With the advancement of enterprise resource planning (ERP) in manufacturing, the turn was made by software developers to build a better way of maintaining inventory. In the past, inventory control was less “control” and more “guessing” as a result of delays in data entry. Before coordination through ERP methods, inventory clerks were ensconced in a paper-based systems that depended very much upon the completion and filing of paper-based inventory forms. Inventory dispositions were often not completely known for 24 hours or so—if ever.

When poor inventory control is combined with poor management in other aspects of manufacturing (selling, purchasing, scheduling, production, shipping, etc.), the results can be disastrous. Indeed, for any defined trading period, it is vital that (more…)

Since the introduction of the lean system of continuous improvement manufacturing (CI), the desire has always been for inventory management that minimizes stock on hand, if not fully eliminating it.

True to lean principals, by eliminating waste at every turn in the manufacturing process quality is improved while production time and costs are reduced. As one of the “seven wastes” in lean philosophy, inventory proves to be inefficient when a plant maintains more on-hand inventory than is minimally required to produce products in the immediate time frame.

Rather than the batched, push-production system where large inventories are maintained for the potential of future sales or supply chain problems, lean methods employ (more…)

In today’s increasingly competitive manufacturing environment, where tightened margins mean tightened grips on waste, running lean inventories is the name of the production game. Materials management is now the art of balancing production scheduling with inventory acquisition—tasks often performed by personnel with varying degrees of responsibility.

In large industrial organizations, the specialization of materials management has resulted in distinctions often drawn between the work of a buyer or purchasing agent and that of a purchasing manager.

While purchasing agents commonly focus on routine purchasing tasks, purchasing managers usually (more…)

As it concerns profit margins, inventory control is one of the more visible and appreciable aspects of the manufacturing business today. Raw materials, goods in process, and finished goods are each the visible consequences of inventory in some form or fashion, and each means actual money locked up until product is finally shipped out to the customer. The longer any of these aspects stands idle in the shop, the longer company dollars get tied up in inventory carrying costs.

Conversely, the shorter the time inventory stays on-hand, the greater are the enhancements to the bottom-line. What every inventory manager seeks is a rapid throughput and system flow of inventory, especially as a result of the supply chain stream so vital to business today. When inventory moves rapidly through the plant, (more…)

Accurate forecasting for raw materials and parts acquisition by inventory managers is an essential science in manufacturing today. With manufacturers expected to move at the speed of the Internet, processing orders, purchasing supplies, producing product, and shipping finished goods out the door must be accomplished with ever-decreasing lead times and ever-increasing expectations of quality.

It is a tightrope walk that inventory managers must take when assessing production needs as a result of sales orders and production throughput.

While customer demand can, in some instances, be anticipated based upon prior history, increased demands or slowdowns must also be contingencies planned for with regards to inventory management. In other words, (more…)