“The more inventory a company has, the less likely they will have what they need” – Taiichi Ohno (Father of the Toyota Production System). Visibility into what your inventory holds is the first step in analyzing inventory bottlenecks.
The first order of business for any materials manager is to get a handle on the inventory valuation and classification.
Set the right safety stock levels, and Order Minimums to procure the right quantities.
Identify excess inventory, inactive inventory and obsolete inventory to make the necessary accounting reserve entries. Excess inventory can cause a decrease in product turnover and a loss of profits, while stock-outs can cause backorders, unhappy customers and lost sales. Excess inventory can be measured by analyzing the existing demand and comparing with past consumption.
The following important questions can be addressed via our dashboards: