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COO, Manufacturing Manager, Director, and direct supervisor with Chief Supply Chain Officer
Cross-functional Management team including sales and operations
Production planning team
Sourcing management team
Experienced estimates – Informal rules that rely on historical data such as “all products made in plant X need 11 days of safety stock”
Predictive models – Using data to break down attributes and their predicted sales for each SKU
Statistical formulas- incorporating the accuracy of sales forecasts, historical data, required production lead times, production schedule adherence and service-level data for each SKU
Combination of Predictive models and Statistical formulas
Value Stream Mapping. As in a flow chart, this tool maps the current and future state of a process, separating value-added and non-value-added activities.
Root Cause Analysis. This set of problem-solving tools aims to identify the root causes of problems or events.
Scenario Modelling. Lean practitioners use this technique to examine the cause-and-effect relationships underlying a specific problem, ultimately leading to identifying its root cause.
Days of inventory beyond replenishment lead time
Quantity beyond the Max levels
No consumption over 18 months
Days of inventory beyond the amount which is required to meet max levels
Check past consumption with a moving average, as this clearly shows what was actually consumed.
Utilize statistical logarithm based on past consumption to define future needs.
Learn all the production requirements by becoming an expert in maintaining the production tools
Utilize an inventory management expert that has statistical tools to learn from past consumption and comprehensive familiarity with the future requirements of the production line, all embedded in one forecasting tool.
Reaching date of expiration
Warehouse resource to manage the inventory
Maintain current suppliers only.
Always challenging current suppliers by introducing competition
A balance between getting the most from current suppliers, and introducing supplier competition, depending on production line maturity / cash flow constraints.
A balance between getting the most from current suppliers, and introducing supplier competition to reduce the quality of the inventory, and therefore the cost.
Threaten to introduce competition to prove to the supplier that their business is at risk due to low quality of inventory.
Audit the supplier’s production line without any notification
Highlight quality in the performance score card when managing the supplier, and provide measureable quality indicator to the supplier
Provide negative feedback regarding the supplier to the professional media
Full dependency on customer ERP
Inventory managed externally on Sub-supplier’s database
Microsoft Excel, paper, folders and laptop, to ensure no data is being scrutinized by the customer
Comprehensive inventory management interface between the client and the VMI service provider.
There is no significant difference between consignment and VMI programs.
Using a consignment program the inventory is at the supplier’s ownership while with the VMI the inventory is at the ownership of the customer
A VMI Program provides a full suite of inventory management solutions tailored to customers’ needs. It can react in real-time to changes using daily data analysis and advanced forecasting models.
Consignment programs are only useful when dealing with new inventory purchases while the VMI program is better suited for managing repairable and refurbished materials only.