blognews

Inventory Accuracy

Production Model

There are three parts to every trip: starting point, path/route, and destination. The starting point for a production schedule is the current on-hand inventory. When the starting inventory is inaccurate then all the scheduling based on it is wrong and costly. Typical symptoms are expedited shipping, stock-outs and schedule interruptions. Building a scheduling model forces you to examine the timeliness of the data especially from third party warehouses. Every time you want to update the current inventory, ensure that all transactions have been posted to the systems (internally and externally). Note that current (perpetual) inventory is a calculated number based on all transactions at each location. These are only adjusted when a physical count is made at the respective location. Also note that in-transit inventories are also counted, up to the time ownership transfers.