TABLE OF CONTENTS Data are an important asset in every business. They are as important as the inventory itself, and when the concepts are combined (INVENTORY DATA), we suddenly realize that we are entrusted with some very valuable assets. High- performance organizations treat inventory record accuracy accordingly.
In both manufacturing and service organizations, inventory accuracy is linked directly to the ability to service customers adequately. Nothing is more frustrating than ordering a consumer product that is available at order entry but backordered in shipping due to warehouse balance errors. Inventory accuracy processes in manufacturing organizations not only affect the customer, but can also add expense as employees become nonproductive as a result of surprise shortages. In both make-to-stock and make-to-order environments with inaccurate inventory records, surprise shortages can often result in business lost to competition. In the rare instance when the customer is patient, surprises cause unscheduled equipment and tooling changeovers and interruptions in what might otherwise be a smooth-flowing and more cost-effective operation. Any way you slice it, inventory record inaccuracy costs money.
Any way you slice it, inventory inaccuracy costs you money.
Inventory accuracy costs more than many management teams realize. This is evidenced by the hundreds of organizations that still today do not have at least 95 percent accuracy. Let s look at some of these cost factors that can affect any business.
Replenishment costs When balances are not accurate, surprises cause additional orders to be placed on rush. Other times, orders are...
