The Benefit Stacks

By Bob Violino

Here are five benefit stacks with areas of inefficiencies that can be attacked, as well as additional benefits that can be achieved.

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Macro-level problem:


Out-of-stocks

Contributing micro-level issues:


• Administrative errors


• Internal theft


• Poor case-picking accuracy


• Poor fulfillment accuracy


• Poor inventory accuracy


• Poor order accuracy


• Product diversion


• Put-away errors


• Slow order fulfillment

Additional benefit areas:


• Reduce chargebacks and invoice deductions


• Reduce cycle counts


• Reduce labor costs


• Reduce obsolete goods inventory


• Reduce spoilage or product


obsolescence

Macro-level problem:


Manufacturing inefficiencies

Contributing micro-level issues:


• Administrative errors


• Poor accuracy of work in process


• Poor raw material and parts visibility


• Poor visibility of parts inventory


• Poor visibility of work in process


• Poor yard management


• Receiving errors


• Supplier fraud

Additional benefit areas:


• Automatic tracking of inbound and outbound material


• Better use of working capital


• Improve regulatory compliance


• Lower inventory carrying costs


• Reduce manufacturing errors/defects


• Reduce stocks of raw material or components

Macro-level problem:


Excess inventory

Contributing micro-level issues:


• Administrative errors


• Cargo transfer errors


• Inability to respond to demand signals


• Internal theft


• Poor dock-to-stock time


• Poor inventory visibility


• Put-away errors


• Receiving errors

Additional benefit areas:


• Reduce cycle counts


• Reduce labor costs


• Reduce paperwork

Macro-level problem:


Excessive obsolete or unsaleable inventory

Contributing micro-level issues:


• Poor accuracy of work in process


• Poor finished goods inventory accuracy


• Poor fulfillment accuracy


• Poor parts inventory accuracy


• Poor parts receiving accuracy


• Poor parts visibility


• Poor visibility of work in process

Additional benefit areas:


• Reduce cycle counts


• Reduce labor costs


• Reduce paperwork

Macro-level problem:


Excessive losses through theft and/or counterfeiting

Contributing micro-level issues:


• Poor cargo transfer controls


• Poor inventory controls


• Poor track-and-trace controls

Additional benefit areas:


• Improve inventory accuracy


• Improve regulatory compliance


• Lower inventory carrying costs


• Reduce cycle counts


• Reduce paperwork


• Reduce product diversion


• Reduce recall costs


• Reduce safety stocks