Too Much Inventory
Symptoms (What do you see…)
- Need more space.
- Inventory growing faster than sales.
- Excess and/or obsolete inventory.
- Clutter.
- Hard to find the correct item.
- Excess material handling and expediting charges.
- Overtime.
- Excess waste.
- Excess and obsolete write-offs.
- High inventory while experiencing shortages.
- Inventory too high relative to sales.
- Cash tied up in inventory.
Causes (What you’ve got…)
- Bad forecasting.
- Over production.
- High write-offs.
- Multiple part numbers for the same item.
- Incorrect order rules.
- Bad forecast or S&OP
- No game plan for excess or obsolete disposal.
Solutions (What might work…)
- Review material and process flow.
- Improve forecasting.
- Apply lean manufacturing principles.
- Modify order rules, lot sizes, lead time, etc.
- Review product definitions.
- Prepare an inventory activity analysis.
- Focus on forecasting or S&OP.
- Implement a disposal program for excess or obsolete inventory.
- Implement ERP or additional modules.
More Inventory Topics
