Inventory Software Solution for HealthcareWhether it is an acute care hospital, long term care facility or community clinic, your healthcare facility can benefit from installing an integrated inventory software solution. All too often, the focus on primary patient care neglects the tools, equipment and supplies needed to support that direct care. Such inventory includes both consumables and fixed assets.

If there is not an organized way to track and manage these items, the result is often a delay at the point of care for the patient. The result could be a scramble to locate an important piece of equipment such as the portable x-ray machine needed in the emergency department. Perhaps a machine is down for repairs so the nurse who needs it has to try to borrow one from another unit. The wound care specialist realizes the stockroom is out of specialized dressings. The list of possibilities is endless.

IntelliTrack Inc. has an easy, effective solution with it barcode or RFID technology. You decide exactly what information you want to collect about your equipment and supplies and who can retrieve it, by query, search or report. A barcode label or RFID tag is affixed to every piece of equipment or furniture and every package of supplies that comes into the facility. The label is scanned with the information transmitted for storage in a central database. Anywhere in your facility, employees who are authorized can track each item through a desktop or mobile device.

1. Improved Quality of Patient Care

There is immediate, real time information on the location, operational status, condition, and availability of equipment and supplies needed for patient care. Healthcare professionals can coordinate their schedules and the availability of equipment, resulting in timely patient care. Also, equipment can be located and moved quickly when needed unexpectedly. It might be as simple as locating an air bed to relieve a severe pressure wound or as critical as accessing a blood bag for an accident victim in emergency.

2. Increased Productivity

Healthcare workers do not have to delay testing or treatment procedures while waiting for equipment and supplies. Up to date information about the availability of these essential items allows them to make informed decisions about whether or not to wait or to move on to other work.

 

3. More Efficient Use of Medical Equipment

Medical equipment, such as imagers and scanners, is expensive and usually requires highly trained technicians. In order to increase the return on investment (ROI) of such equipment, it is useful to have data about usage and technician availability. Such information helps you, as an administrator, plan for maximizing equipment use. Many hospitals now operate this equipment day and night to limit patient backlog.

 

4. Equipment Lifecycle Management

Your healthcare facility probably has many kinds of equipment, from imaging machines and dialysis units to wheelchairs, office computers and floor cleaners. No matter how sophisticated or expensive, all these pieces of equipment eventually have to be replaced or upgraded. It is easier for you to manage the lifecycle issues with detailed information ranging from the procurement date, price and vendor to maintenance schedules, repair records and disposal plans. Depreciation information can be built into calculations.

 

5. Planning

With inventory software on a central database, you and your management team are able to plan more effectively as you can access:

  • Real time operational information about demand for equipment and supplies, stock levels, maintenance issues and even staff availability to use the items
  • Aggregate data that shows emerging trends; e.g. changes in demand for equipment and supplies resulting in stock surpluses or shortages
  • Equipment and furniture lifecycle info for budgeting replacement pieces

 

IntelliTrack can work with you to review your operations and recommend the best inventory software for your needs. Our experienced IntelliTrack specialists can design a barcode or RFID technology solution that includes their excellent software systems and reliable, state of the art hardware from trusted partners.

 

IntelliTrack is not completely off the shelf. We do produce standard inventory packages such as:

  • Fixed Assets for equipment and furnishing
  • Check In/Out for shared equipment and tools such as laptop computers
  • Stockroom Inventory for maintaining medical, administrative and cleaning supplies at an optimum level

However, all our inventory software can be customized so it is the right solution for your specific operations.

 

Contact us to start the discussions about the right inventory software solution for your healthcare service.

Inventory-SoftwareIntelliTrack Inc. is proud of the range of technology solutions it can provide to streamline your inventory management operations. Whether you run a warehouse, distribution center, hospital or emergency response service, this industry leader can provide customized software and the best hardware available for you to track and manage both your consumable inventory and fixed assets. Over its 20 years corporate history, IntelliTrack has developed partnerships with proven, reliable manufacturers of scanners, printers, mobile computers and other tools that support its excellent inventory software.

However, the IntelliTrack specialists also understand there is more to a solution than first class technology. The efficiency and cost effectiveness of any barcode or RFID solution is determined by the users at all levels of the organization. That is why the IntelliTrack team is prepared to work closely with you and your employees, from decision making about the best products through to installation, training and follow-up support services.

You probably do not want your employees to become barcode or RFID experts. However, both front line users and the management team need to be comfortable using the technology. Only then will they be able to give useful feedback and explore ways to maximize the functionalities of the system. How do you make this happen?

Front Line Users

There are few people who immediately embrace change in their routine. In order to overcome any employee resistance to using barcode or RFID technology, you might want to consider and plan for:

  • Participation in System Design

Provide as much opportunity as possible for the front line users of the technology to be involved in decision making around the design. It might be as simple as providing feedback on the ease in holding various devices or the format on a screen or as complex as critiquing the efficiency of data capture. An IntelliTrack specialist can advise you on how to involve these essential employees.

  • Ongoing Communication

Make sure all employees know the status of the process from initial consultations with IntelliTrack to the implementation schedule.

  • Training

It is usually useful to provide various modalities of training, from manuals to online instructions and group sessions. The content should include not just the “what to do” and “how to do”, but also the rationale for the procedures. If employees understand how the steps they take affect the workflow, company planning and customer satisfaction, they are more likely to have a positive attitude.

  • Opportunity for feedback

Do not just provide opportunities for feedback after implementation. Actively solicit employee comments and suggestions. Show that you take their input seriously.

  • Ongoing support

Make sure you have ongoing technical support that is available at all times the employees are working. This is especially important at the beginning of implementation and for new employees.

Management Team

Anyone on the leadership team, from front line supervisors to managers responsible for departments such as IT, finances, HR and purchasing, needs to be involved in the process of planning for and implementing barcoding or RFID solutions. The primary factors are the same as those of the front line users; the scope is usually larger and more integrated:

  • Participation in System Design

Whether your business is one small warehouse, a large hospital or a multi-site distribution operation, you will want a technology design that coordinates and integrates all the data capture. To achieve successful integration, you need to involve the key personnel for each function from the beginning. Their decisions are not just around devices and software, but also identifying the interfaces of the functionalities and the kinds of reports that are needed for monitoring and planning operations. If there is already a larger ERP system in place, this new technology might be incorporated easily into it. The people actually using the systems are the ones to provide input into the design.

  • Training

Not everyone needs the same kind of training but everyone who will use any part of the new technology has to at least understand the basic process and the information that can be entered and accessed. Again, it is important that everyone understand the rationale for the overall barcoding system and for the way it works to everyone’s advantage.

  • Opportunity for Feedback

Feedback from the management team is important to the overall success of a barcoding or RFID solution. These are the people who will see the more strategic impact such as trends in increased customer satisfaction, decreased employee turnover and increased profitability. When they make suggestions about changes, they deserve to be taken seriously.

Installing an effective barcoding solution depends on much more than state of the art technology. IntelliTrack certainly can provide you with the best in customized software and hardware. However, they are also prepared to spend the time with you to develop a solid implementation plan that involves all company stakeholders. With IntelliTrack expertise and your employees’ active involvement, your barcode or RFID solution is sure to be successful.

Warehouse OperationDo you fit the profile of business owners who want larger warehouses? Seventy-one percent of respondents to a 2014 study by Motorola wanted either to acquire another facility or to increase the size of their current building. There are usually a couple of obvious reasons:

  • The volume of your business is growing, and/or
  • You are expanding your product lines

If you are confident this growth is sustainable, you need the extra space so warehouse expansion seems like a good idea. After all, the economy appears to be turning around with an uptick in consumer spending, resulting in an increase in manufacturing. Also, e-commerce is enjoying a huge popularity with no end in sight. Huge warehouses are a staple for online businesses which must be ready to respond instantly to customer demands.

Technology Considerations for Warehouse Expansion

However, there’s more to warehouse expansion than leasing another building and buying product to fill it. Do you have the technology solution in place to manage that extra product, especially if it is located at several sites? Handling more products usually means managing more personnel too. At IntelliTrack, we have a team of specialists just waiting to discuss your particular situation and see how we can help you.

We understand the complexities of a warehouse operation. There are many points where human error can be a problem in receiving and storing product and processing customer orders. An IntelliTrack barcode or RFID solution can minimize, if not eliminate mistakes in labeling, storing, accessing and shipping your inventory.

The larger you grow your operation, the more opportunity there is for making mistakes. In order to plan for foolproof inventory management, start by asking yourself the following questions:

  • Do you handle consumable inventory, fixed assets or both?
  • Consumable items come into your system, are processed and move out. This includes products that are stored or manufactured, then shipped to customers.
  • Fixed assets are part of your property inventory, are used or deployed and then returned. This includes your own equipment, tools and supplies and items that are sent out, perhaps leased to customers and then returned.
  • What information do you need about the product in the warehouse, including lot and serial numbers, vendor, expiry data, condition, size and color?
  • Do you need to validate shipping against predefined orders?
  • What information do you need about stock levels, including re-order alerts and data on surpluses?
  • How often do you do physical counts?
  • What do you need to know about employee performance, including equipment usage and time taken for receiving, storing, picking and shipping?
  • Do you need to track assets or equipment that is deployed repeatedly?
  • Do you require real time data in order to monitor operations?
  • What kind of reports do you need to make management decisions for planning operations and financial management?

All this information will form your decision about a warehouse management system. The best technology in the world is ineffective if it does not meet your particular needs. 

Technology Solutions for Managing Warehouse Inventory

There are many software solutions available for managing your warehouse inventory. A sampling includes:

You are probably looking for a mobile solution to increase the productivity of your warehouse workers. Issue each one with a mobile device for capturing data for storage in a central file and accessing picking and shipping orders and any other information needed to keep product moving.

Scalability is an important feature of a successful software solution. If you are considering expansion of your warehouse operations, you want to be sure any technology will be able to accommodate the increase in product, vendors and customers.

Integration into larger information systems is also important to save time and duplicate work. Link a WMS solution to an accounting system such as QuickBooks, to shipping providers such as WorldShip and even to your security information system if there are concerns about inventory loss.

Decision Making Process for Warehouse Technology

Whether you are making the leap from a manual or spreadsheet inventory system or upgrading your current electronic system, you will probably need expert help in considering the options available. The IntelliTrack team can walk with you through the decision making process:

  • Review of current operations and plans for expansion
  • Identify points where technology can support the operations based on answers to the questions about your consumable and fixed inventory
  • Discuss benefits of incorporating a warehouse
  • Review with you the pros and cons of various warehouse management technology solutions, both software and hardware
  • Recommend solutions and support your decision making
  • Facilitate installation, training and implementation of warehouse management solutions
  • Arrange for ongoing support services

Benefits of Expanding with Warehouse Management Technology

An attractive ROI is important when considering expansion of your warehouse operations. Even when you know the market is there and the product is available, you do have to consider how quickly you can amortize the upfront capital expenses such as:

  • Buying, building or expanding a facility
  • Customizing the building design including dock and yard
  • Purchasing/leasing additional warehouse equipment
  • New or additional technology hardware and software for inventory management

IntelliTrack reps would be pleased to show you the kind of savings you would realize if you move from a pen and paper inventory to WMS technology. For example, a small warehouse operation can save 90% in labor cost using barcode technology instead of manual inventory counts.

The procedures you are following in your warehouse now might not work as effectively in an expanded operation. It is important to have a WMS system that allows you to monitor the entire end-to-end process. Such technology is efficient and accurate, increasing productivity, reducing picking and shipping errors and increasing customer satisfaction.

Contact our IntelliTrack team to help you plan for a WMS solution to be built into your warehouse expansion plan right from the beginning.

IntelliTrack Warehouse Management SoftwareManaging the inventory of a warehouse or distribution center can be an exercise in frustration. There are many points where errors in labeling, storage location or stock levels can leave employees frustrated and customers very unhappy. Working in multiple locations can add complications.

Warehouse management technology is a good solution and even better when part of an integrated Enterprise Resource Planning (ERP) system. IntelliTrack, an industry leader in inventory management products, offers several technology solutions for successful inventory management of all sizes of warehouse operations. They also have the experience and expertise to recommend options for integration with ERP.

Warehouse Management Inventory Solutions

IntelliTrack WMS is a robust, cost effective solution for managing inventory through the warehouse and distribution system. It is available in three versions:

Depending on the operational needs, available features include:

  • Physical inventory, shipping, receiving and picking system
  • Terminal messaging
  • Pallet tracking
  • Cross dock notification
  • Sequenced pick and put away
  • Wave and zone picking

The entire inventory can be managed from one dashboard, including product search by item description or location, browsing and generating reports.

ERP Integration

Warehouse employees and supervisors know their work is the primary focus of their warehouse/distribution operations but they do need the support of many other business functions to run a successful operation. An Enterprise Resource Planning (ERP) system facilitates the flow of information among all the business units and can even manage contacts with external stakeholders.

How ERP Works

An ERP solution is really a suite of applications such as WMS that are managed through one common database. It can support various hardware and applications even for mobile devices while maintaining a consistent look and feel for the user. For example, data is transmitted from a warehouse worker to the centralized database where it is processed and any net changes, orders or reports sent back to the user and/or on to other support services and management.

IntelliTrack WMS has the capacity to be integrated into a full feature ERP system which might use a common database for:

  • Supply chain management, including inventory info that triggers purchasing, promoting specials on overstock or moving stock to different location
  • Processing orders from receiving, cross docking and generating picking orders and shipping labels to sending a re-order alert to purchasing
  • Accounting functions, including processing payments for product received, invoicing for product shipped, managing cash flow and preparing financial statements; e.g. WMS can connect with Quickbooks
  • Customer relationship management (CRM) from sales and marketing to customer service
  • Human Resources function which includes recruiting, training, managing payroll and benefits and performance reviews
  • Self-service access to information for suppliers, customers and/or employees

Benefits of ERP Integration

Although the ERP concept was originally developed for large companies, it quickly became obvious that any size of organization can benefit from system organizations. There are two primary focuses for reviewing the benefits of integrating IntelliTrack WMS into a larger ERP system.

  • Operations

A well designed ERP solution increases efficiencies and productivity such as:

  • Eliminates entering data more than once in various information systems such as purchasing or generating shipping labels, allowing employees more time to communicate with each other about operations
  • Provides real time data including location, stock levels, expiry dates and status of product
  • Allows every authorized person access to the same real time data
  • Management

Having WMS integrated into an ERP system with one central dashboard is cost effective and efficient as it:

    • Provides up to date info for monitoring operations
    • Provides info for performance management of individual and work teams by providing reports on time spent and cost of each activity
    • Identifies inconsistencies and potential problems such as stock shortages that are not triggering re-order alerts, all affecting customer relations
    • Maximizes the capacity of all the company technology, decreasing dependency on several information systems, each with its own capacity and maintenance issues
    • Decreases the amount of IT support needed
    • Supports quality assurance initiatives which can lead to improvement in the routine operations and the overall business process
    • Provides comprehensive reports to support any expansion plans for the business; the more complex the business, the more important it is to have a coordinating function
    • Produces customized financial reports to reflect the various business processes and allow for more specific financial management decisions

Overall, the data available from having IntelliTrack WMS integrated into an ERP system allows employees to be more productive and management to be more strategic. An integrated information system is more flexible and responsive to change than an organization with compartmentalized processes. Management can plan and even test operational changes. As soon as the implementation goes live, they receive immediate feedback on how those changes impact the work and results across the entire operation.

Management decisions about operational changes, budgets and staffing models will be evidence based. This increases the feasibility of moving in a certain direction. The integrated model also allows for ongoing monitoring and evaluation of changes which leads to problem prevention or early intervention.

IntelliTrack WMS solutions are available for any size and kind of warehouse. However, their effectiveness can be greatly enhanced if they are attached to a company-wide ERP system.

Contact the IntelliTrack team of specialists to start the discussion of installing or upgrading your warehouse inventory management system.

As executives who work in procurement find themselves under more pressure to provide value for their stakeholders, they must come up with new and innovative ways to achieve a streamlined supply chain. In 2015, they will need to look at their procurement operations and focus on how to extract the most value by looking at their goals and processes.

The level of expectation placed on procurement is growing at a fast pace and managers need to take control, or risk being left behind. In order to help with this, let’s review the five major areas that will effect operations this year.

Organizational Alignment
The first is organizational alignment, which will require more emphasis in the coming year in order to stay ahead of the curve. In order to do this, procurement needs to improve upon the relationships it has with other aspects of the organization—finance, sales, marketing, R&D, etc. If these relations are improved, it will mean that procurement is moving towards delivering the amount of value required by the business and it’s stakeholders.

Inventory Strategies
The second area to look at is inventory strategy. The rise of multi-channel retail means that simplification of the supply chain and shortening the life cycles of products and new technology are of utmost importance to leaders in procurement. In 2015, they will have to focus on strategies that can optimize their ever-expanding inventory network and help improve the service they provide to the customer.

Performance Management
The third area is performance management in real-time. Central to this will be cloud-based software, which is now crucial to the supply chain, especially when it comes to purchasing. Procurement leaders will be able to build on their relationships with partners in sourcing and have more insight into the supplier base, which will ultimately help save money.

Emerging Markets
The fourth area is emerging markets as a source of growth. These include markets in Asia and South America, which have been identified as sources of growth in logistics and manufacturing. 2015 will see supply chain executives capitalize on these, which will, in turn, have a significant effect on the supply chain. As a result, pricing, product design and logistics will all be impacted.

Partners
The fifth and final thing to note is that suppliers will become partners in the sharing of information related to problems you might share. This will provide procurement with more information than just what is related to product specifications, as they will be able to see how their suppliers solve problems.

The market for warehouse management systems continues to grow at a rate of about 6% per year. This growth is driven by the economic landscape, which has been improving and thus encouraging companies to devote more of their budget to technology. This money is showing up in the DC, bringing a more streamlined system that is much more visible and easily analyzed. It also goes towards upgrading and replacing existing, outdated solutions.

Let’s examine this growth and the state of the WMS market currently—find out which are the key trends in the industry and highlight the technological developments on the horizon.

WMS Harnesses the Power of the Cloud

Dwight Klappis, VP of research for Gartner, says that there has been a rapid trend for companies adopting cloud-based WMS solutions. Worries over whether to protect data with a firewall or open it up to the web, and worries over performance and scalability, have been put to one side. Cloud-based management systems have become a preference for the majority of shipping companies.

WMS Continue to Evolve

Even though WMS is the major player in supply chain software, the makers of products are still seeking to find ways to improve their service. This attitude is motivated by the needs of their customers, and the innovations come in many shapes & sizes. For example, at a basic level, the vendors of software are focusing on the development of solutions to support processes like cross docking, multiple manufacturer facilities and bypass shipments.

WMS Goes International

Demand for WMS shows up outside of the US as well—emerging markets are said to be about 15 – 20 years behind the WMS systems of companies operating in established markets. In emerging markets, businesses are evolving towards a point where even rudimental developments in WMS are becoming extremely important, and are set to gain a greater foothold as businesses continue to strive towards meeting orders in an efficient and timely manner.

What do you see in store for WMS? Share your thoughts by commenting on our Facebook or twitter pages.

There is much speculation about the impact that artificial intelligence (AI) will have on the transportation industry, though as yet there is not much implementation. The benefit of its application will be in filling the shortage of workers in the logistics industry. Now is the time to make a new strategy for distribution networks as part of the ongoing digital revolution.

E-commerce is extending into B2B transactions, nano stores are becoming popular and we now have a circular economy. Due to these factors, the flow of goods will gain speed, increasing in frequency and intricacy. Over the next ten years, packing density, which is the amount of order lines per meter cubed, will grow by five to ten times. The cost of transport or storage will not be the major influence on the organization of distribution networks. This will rely on how efficiently goods can be handled, and the logistics industry is changing due to developing technologies.

There are three such developments that will have a major impact upon distribution networks, they are: Trans-European Transport Networks (TEN-T), autonomous transport, which will transport goods over these networks, and the developments in warehousing technology.

TEN-T is a group of ten designated transport links which cross national borders which will be built and developed by the European Commission until 2030, and will include innovation over railways, roads and water. The objective is to firm up the transport infrastructure in Europe by implementing intelligent management systems to the transport network, in the hope that costs will come down. The new network will be safe and robust, and will carry goods uninterrupted and reliably along it’s corridors between Europe’s major hubs.

Autonomous transport in the form of unmanned trucks is becoming more possible with developments in AI. Wireless technology will be used to interconnect ‘road trains’ with a manually controlled truck at the front. They will need to have the capacity for enough volume and frequency; therefore distribution centers will need to be enormous in order for logistics companies to combine the flow of transport across chains in order to deliver more frequency & reliability.

Distribution centers are also becoming what is known as ‘dark stores’, where robots, RFID chips, automated case picking, GS1 pallet labels, dock & roll and pick by voice are the technologies which are combining to handle the increased intricacy and frequency of deliveries, and DC productivity has been increasing exponentially as a result of their implementation.

The ever-expanding UK distribution and logistics sector is a significant slice of the economy as a whole, providing a large amount of employment. The challenge is to meet the needs of the industry in terms of skilled workers in order to continue expanding and provide the service customers require.

This article is aimed at establishing the skills requirement of the distribution and logistics industry, and it is also intended to establish the reasons for investing in skills education. In order to do this, the example of a couple of skills and training providers from Sheffield City will be used to establish how training providers work with the industry to meet their skills requirements.

The UK’s distribution and logistics industry encompasses over 187,000 businesses and is worth £93 billion per annum to the national economy and it provides employment for 2.25 million workers—approximately 8% of the entire workforce. During this decade, these numbers are predicted to increase. Data from Skills for Logistics, which is the industries skills sector, estimates that an additional 917,000 workers will need to found during the decade from 2010 to 2020.

Further data from the National Skills Academy suggests that a shortage in skills is having a negative impact upon logistics and warehousing operations. These shortages are undoubtedly bad for business and have a detrimental effect on the balance sheets. For example;

  • 47% of respondents claim to have difficulty recruiting because they can’t find applicants who meet their skills requirements
  • 20% claim that applicants didn’t meet their qualification requirements
  • 54% claim that the failure to fill vacancies increased their operating costs
  • 47% claim that the failure to fill vacancies made achieving customer satisfaction more difficult
  • 39% claim that the failure to fill vacancies mad it more difficult to achieve standards in quality

The Sheffield City Region is a national hotspot for logistics companies, where the sector has grown by 29.5 % in the period since 2009. This growth brings with it an increased need to invest in skills and training for the industry. In the region it is provided by Barnsley and Doncaster colleges, whom work closely with companies such as Aldi, Amazon and DHL in order to provide the training they expect their employees to have.

Both colleges have a dedicated sector specializing in Warehouse Logistics and Retail to counter the growing demand, and are considering a development comprising of two completely new Warehouse Academies close to their respective campuses. These colleges clearly have both the capabilities and funding available to meet the need for training, skills development and qualifications required by the distribution and logistics sector, leading to more profit for all concerned.

3d printingThe progress of 3D printing technology has been rapid. It has moved from it’s initial state as a tool for making simple polymer objects as the invention of Charles Hull in the 80’s, to building complex parts for race cars, aircrafts and even human organs and prosthetics.

The business community is starting to embrace the potential of 3D printing as a tool for more efficient and environmentally friendly manufacturing processes. Canalys, an analysis company, anticipates that the worldwide market for 3D printing will be worth $16.2 billion by the year 2018. With an increase in adoption, 3D printing will bring a revolution in manufacturing, including the supply chain and everything that involves—including logistics.

Manufacturing can be outsourced to locations where it can be completed for a low-cost. However, the global logistics process is not due to the cost of transport. This problem can be addressed using 3D printing to locate manufacturing plants closer to the intended market. This will reduce the geographical distance covered by the supply chain and also have a positive impact on the carbon footprint.

The new manufacturing plants can also help companies to deal with inventory problems, specifically the industrial parts and consumer based sectors that provide specialist products. 3D printers will help manufacturers to efficiently produce bespoke goods, saving money and reducing waste.

As the 3D printing processes become more efficient, new businesses based on a quick turnaround will emerge and traditional manufacturers will move to produce more technical and specialized components. More common products will be made by 3D shops and inexpensive one-off products will eventually be made by consumers themselves. By simply purchasing and downloading a program for the 3D printer, consumers will be able to purchase items such as plastic toys, smart-phone cases, and more!

These developments are not imminent, but they will happen eventually. What needs to be understood at this stage is the potential for an increase in the speed of trade brought about by 3D printing. Companies will need to re-evaluate supply chain management processes in order to handle the impact of 3D printing.

There are legitimate concerns that this type of manufacturing will lead to more consumption, and therefore, more waste. However, the materials used in 3D printing processes are largely recyclable plastics that have been through a heat treatment process. This brings the possibility to reverse the supply chain approach—consumers will be able to recycle old unwanted plastic goods by returning them to a local 3D printing outlet, where they will be sent to be re-processed into a plastic filament for 3D printers.

How do you think 3D printing will impact the manufacturing industry?

Share your thoughts on our Facebook and twitter pages.

As part of his mission to gain a better understanding of out-of-stocks (OOS), Dan Gilmore, president and editor-in-chief of Supply Chain Digest, has held a recent discussion on how extra inventory can be driven by lead time variability. For those who do not protect themselves from lead time variability, there is the prospect of more out-of-stock (OOS) occurrences. In each occurrence of variability in the supply chain, it is important to protect it with increasing inventory, capacity, or time, by making customers wait or an increase in OOS.

Gilmore also released an online inventory calculator to make the concepts more clear and demonstrates the impact of a reduced lead time. The math of the calculation is difficult, but the underlying intuition is less so—a late shipment means that you must have the inventory in reserve in order to meet demand in the meantime. Therefore, reducing lead-time variability has a significant impact on OOS or inventory.

He also states that in spite of the evidence pointing to how important lead time variability is, only a very small amount of companies track it.

Problems arise from the fact that it’s not always easy to get insight into lead time and variability. Existing systems are not yet equipped to track it. Here are three areas defined as those to measure in order to be able to measure lead time and variability. Each should be measured separately, as they display different characteristics:

Transit Time
The first is transit time. Transit time is measured from when a product departs the suppliers’ dock and arrives at your companies dock. This is the most straight-forward area as the data is accessible. A calculation can be made between all of the transit times by calculating an average and standard amount of deviation. It’s made slightly more difficult by shipping via a variety of platforms and these should be taken into account, e.g. the difference between ocean shipping and air freight must be taken into account, and a decision whether to calculate the dominant method or a blend must be taken.

Order to Ship Time
The second is the order to ship time—the time between when the order is placed and when it is shipped. For suppliers, this is comparatively easy, by measuring when the order was placed, having visibility of the shipment data and knowing when the item shipped. It gets more complex if the order changes frequently or the PO is open. In this case it could be tough to decipher when the order was placed. It’s even harder if you are dealing with your own plant, in this case it is the time from when you made another batch until the item ships.

Replenishment Frequency
The third is replenishment frequency—the extra time occurring from periodical production. If you place an order once a week, that’s an extra week of lead-time. Even daily orders are subject to how often they are shipped. Unless the production schedule is fixed this can lead to difficulty, variations in production must be factored into lead-time calculations.

Need help with your inventory management? Find the right solution for you.