Ramlee Ibrahim & Associates

Traditional measures of accuracy can be a double-edged sword. While their objective is to confirm cost or inventory accuracy, these methods often serve as a disincentive by inadvertently discouraging an all-out effort to find and eliminate the real root of the problem. When too many inaccuracies are found, the company’s calculated inventory accuracy drops, and this reflects poorly on the worker or workers responsible.

In this instance, the manufacturer needs to understand that inventory accuracy is only an indicator of performance and is not a true measure of the actual process. By definition, performance measures track a process, but something must have been performed in order to have a performance measure. Cycle counting is a process and has a performance measure related to its effectiveness.

Traditionally, companies judge a cycle-counting process based upon a measure of inventory accuracy. The more the process confirms the accuracy of the company’s inventory, the higher the process’ measure of effectiveness – or so it would seem.

Challenging The Traditional Measures

Consider the results of the cycle counts shown below. The mix of counts is representative of the category mix in order to suggest a level of inventory accuracy across all parts. Compare the total calculated accuracy of 98.7% with the following weighted calculation (there is more than one way to calculate accuracy): Read the rest of this entry →

One of the joys of being in the world of operations management is dealing with consultants. There are two major categories: the software consultant and the operations/strategy consultant. They are different animals and must be handled with care and wisdom, but you can survive the experience and even prosper. 

The Software Consultant

Software consultants are usually employed by major software companies – their job is to help you implement their software. Broadly speaking, there are two types of this first category of consultant: the module mechanic and the more seasoned operations or business type.

The Module mechanics are usually freshly out of school and have been trained intensively in how a particular module – SAP finance or BOM – works. They will be responsible for configuring the module based on their own requirements; they’re smart about the software and confident in what it can do. They invariably let you know that all you need to do to be successful is use the system in a vanilla fashion. They will also work many hours to make things happen for you. Most of them, however, have little or no actual floor or operational experience. They may have done several implementations but have not been a real user. Pick their brains about how they system works – they willo take great pride in showing you all sorts of module capabilities. Learn the system from them, but understand they know little about the real world and making things happen. Read the rest of this entry →

The Supply-Chain Council (SCC), a global not-for-profit standards organization, announced the release of version 9.0 of its Supply-Chain Operations Reference (SCOR®) Model. This major update, formally launched at SCC’s Supply-Chain WorldConference & Expo, includes expanded risk management capabilities, as well as new features to guide companies’ environmental sustainability efforts—the latter of which incorporate and expand the capabilities of GreenSCOR, formerly a standalone variationof the SCOR model.  Read the rest of this entry →

This question have been asked by many practitioners from all three schools. Before we deep dive into this discussion, a few introductions into each of the above methods is in order for the benefit of those less familiar with either or all of those. Read the rest of this entry →

It may surprise some of you that not all manufacturing managers value excellent customer service, low inventory and fast throughput. What we have come to know as the “bad old days” is still embraced like a comfortable security blanket in some companies.

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Pundits will continue to predict economic recovery or decline. But the only certainty is that economic conditions will change in the future (for better or worse). How manufacturers react to such changes can have a significant impact on the service levels provided to their customers and the amount of working capital they have tied up in finished goods inventories (FGI). Periodic and practical reviews of FGI levels, based on item performance can yield significant benefits to manufacturers and their customers. Given the impact this can have on customer service levels and a company's balance sheet, it goes beyond being simply an operational best practice and deserves the attention of senior management.

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Recently I was asked, "Why is implementing lean manufacturing such a big deal? The book I just read suggests I only need to worry about managing the value stream. Why is it so hard to do?"

While the effort required to be successful in an enterprise resources planning (ERP) system implementation is fairly well documented and understood, implementing lean and world-class manufacturing is far less clear. To help those who have a strong background using ERP systems, let's draw some analogies common to both types of implementations. Read the rest of this entry →

Enterprise Sales & Operations Panning: Synchronizing Demand,  Supply,  and  Resources for Peak Performance

By George E Palmatier with Colleen Crum

J.Ross Publishing

In their book Enterprise Sales and Operations Planning: Synchronizing Demand, Supply, and Resources for Peak Performance, George Palmatier and Colleen Crum invite the reader into the inner workings of Universal Products Company, a division of Global Products and Services, Inc. The reader gets to spy on a company, discover how it operates and learn abouot senior staff, and see how a company can be turned around. The story is not all rosy. A number of major internal problems surface early on and the book follows the hero, Mark Ryan, as he meets key individuals and faces major issues in his effort to fix those problems.

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The crux of managing inventory effectively is to ensure that our distributor will be able to at least meet or exceed his customers' expectations in order to maximize his profits. Customers' expectations differ – some will demand immediate delivery of an ordered item but some are prepared to wait longer. But what is relevant is to examine if customers are always this demanding. Surely there must be some items demanded that can be delivered in a certain time without negatively jeopardizing the customer service levels?

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System complexity, an inherent element of most modern production and inventory control systems, creates a plethora of direct and indirect costs. To attack complexity, the manager must attack its effects and then identify and address root causes.

Complexity shows up in excess inventory, increased lead times, and falling quality levels (yields). Lets be clear, though, about one thing. There is nothing wrong with complexity if that’s what the customer – especially the critical customer – wants and is willing to pay for. But complexity is wrong if it results from our attempts to satisfy customer demand at all costs or from our tendency to view and attack problems in isolation without drawing on past solutions.

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