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8 October 2008 www.strategosinc.com
I recently spoke with a company that was
having difficulty with their inventory accuracy. Their situation, unfortunately, was fairly
common. It illustrates an apparent paradox in cycle counting: The
better the accuracy, the less effective the counts.
Their finance department had instigated
cycle counting with a goal of 92% accuracy. They intended to
eliminate the annual physical inventory when that accuracy was reached.
Their accuracy had risen quickly from
the original 60% range but hit a sort of Glass Ceiling at 86%. Accuracy had been
stuck here for six months and frustration was growing. The situation is detailed as a
new case study in our cycle
counting pages.
These pages and my book,
The Strategos Guide to Cycle Counting & Inventory Accuracy,
explain what was happening and what to do about it. The book is available as an eBook (personal use) and a Training Edition for
your own workshops.
If you are considering cycle counting,
check out our web pages.
Even experienced people may find some new and interesting perspectives. We also offer a
free estimating tool
that simulates a cycle counting system. This tool allows you to explore different scenarios such as varying cycle counts,
the effects of ABC stratification and error rates.
I hope you find the articles helpful and
worth exploring.
Best Regards,
Quarterman
Lee
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Lean Operations Seminar
Jakarta, Indonesia - 6-7 November 2008
- Quarterman Lee, Facilitator
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