IMPLEMENTATION OF INVENTORY MANAGEMENT POLICY
Implementation of Inventory Management Policy, or the process of ordering components based on actual demand rather than pressure, is a crucial aspect of efficient supply chain management.
We propose a three-step method, which includes:
Step 1. SCM Training (Supply Chain Management)
Step 2. IMP Training (Inventory Management Policy)
Step 3. Implementation Workshops
- Identification and enhancement of inventory management mechanisms.
- Improvement of material availability and optimization of inventory levels.
- More efficient utilization of planners' and materials procurement personnel's time.
- Reduction of excess and obsolete material inventory.
- Identification and mitigation of the root causes of inventory build-up.
STEP 1. SCM TRAINING (SUPPLY CHAIN MANAGEMENT)
GOAL: ACQUIRING KNOWLEDGE AND OVERCOMING RESISTANCE TO CHANGE
The team's resistance to change often stems from fear—the fear that the old approach, while flawed, might be better than the new one. It's crucial to challenge this mindset and encourage the team to step out of their comfort zone. By providing opportunities for exploration and discovery, you can help them realize the necessity for change.
During the training, your team will learn a variety of essential concepts, including:- The mechanics of integrated planning and its role in anticipating significant fluctuations in demand.
- The importance of validating inventory information to achieve significant reductions in inventory levels.
- Strategies for selecting the most suitable production environment to enhance customer satisfaction and meet their needs effectively.
Following SCM training, identify 2-3 team members who are particularly enthusiastic about implementing changes, and collaborate with them to create a checklist. This tool will help assess areas where integrated planning can enhance company operations and confirm if optimizing inventory management processes is the most beneficial course of action for the company.
If the outcome of this exercise confirms that optimizing the inventory management process would be beneficial, we recommend proceeding to the second step.
STEP 2. INVENTORY MANAGEMENT POLICY TRAINING (IMP. INVENTORY MANAGEMENT POLICY)
GOAL: DEVELOPING CHANGE
After completing the checklist, the next step is to equip leaders with knowledge about the process. Enroll them in the IMP training.
During the IMP training, leaders will learn various aspects including:- The ideal workings of the inventory management process.
- Methods to determine and measure inventory size based on its intended use.
- Techniques for inventory categorization.
- Strategies to prevent obsolete inventory.
- Determining optimal purchase and production batch sizes.
- Understanding the concept and application of safety stocks.
- Effective utilization of the existing ERP system.
Leaders will also have access to an implementation handbook, empowering them to develop a prototype of the process within their chosen company setting. Moreover, should they encounter any queries or challenges, they can take advantage of complimentary coaching sessions with our trainers.
Armed with the insights garnered from the IMP training and accompanying materials, leaders can initiate testing of the inventory management process on select indices. During this phase, they will tailor the process to suit the company's unique requirements.
STEP 3. IMPLEMENTATION WORKSHOPS
GOAL: Consolidating the new approach throughout the company
Once the prototype begins to demonstrate tangible results, you can proceed to extend the implementation across the entire organization. Showcase the achievements to everyone, illustrating how the new approach enables better and more efficient work, encouraging others to join the implementation efforts.
Organize an implementation workshop, utilizing the successful case from the previous step as a model.
Utilize the expertise gained by leaders to ensure the process becomes ingrained within the company, with them serving as internal process experts.
Interested in seeing if this method fits your organization's needs?