Managing Inventory in the Downturn

The signs of the coming downturn are widespread. UPS volume slows 10%, Amazon lays off warehouse workers and stalls its expansion. The list goes on. Inventories expand in downturns. Inventory Turns drop. How can we cope? Here are simple practical steps to stem the routine inventory expansion in downturns.

Almost all forecasts are a mixtures of recent and older history, recent and older past unit sales. For example, in the exponential smoothing technique with a smoothing…

Supply Chains’ Chain Reaction

The purpose of supply chains is to move material from one place to another quickly and cost efficiently. Our current global supply chains have failed at both.

Modern globalized supply chain components are so intertwined that disruptions in one link cascade throughout the chain and disrupts all the other components in a chain reaction. Modern global supply chains evolved over a period of about 40 years of continual steady growth that drove the design of components in a stable..

How To Design A Carton Regime

Many organizations have a set of corrugated cartons, a regime, used as shippers. These regimes range from a few sizes to many with various dimensions and grades. Just what the dimensions are greatly impacts a variety of costs—material, warehousing, and freight. Importantly, customers’ perceptions are shaped by our packaging when, for example, they open their cartons and discover 70% of the contents are air or dunnage. That risks customers switching to “greener” competitors and criticism on social media..

Allocation of Scarce Coronavirus Medical Supplies

Allocating scarce critical Coronavirus medical supplies should depend on several factors including
– Who is doing the allocation—a national government as guidelines or mandates, an agency such as FEME or an individual Supplier company such as Abbot, Medline, Mackeson or Cardinal
– The efficacy of the material being allocated─more efficacy means the allocation method is more important
– How effective the recipient is in..

Rebalancing Network Wide Inventory

Companies with multiple warehouses that perform similar roles, such as regional roles, routinely find themselves with too much in one location and too few of the same Item(s) in another. Rebalancing across warehouses might be the answer.

It’s natural to find the On-hand quantities in various warehouses at different levels and with different Months’ Worth. The randomness of demand, differing regional customer preferences, different..

Balanced Orders

Many organizations order multiple items from suppliers on a repetitive schedule—weekly, bi-weekly, monthly and so on. These same organizations maintain Reorder Points (ROPs) by item which triggers “when” to place orders. These ROPs and the repetitive reordering are incompatible; they work at odds with each other. The way to correct this incompatibility is to place “Balanced Orders”.
Repetitive ordering and ROPs are..

Curse of the Slow Movers

Most of us intuitively know that slow moving SKUs are a problem. But just how big is this problem and why do we all have it? Why have we had it for so long; is there no resolution? In the 21-st century, with all our technology, have we not solved this problem, eradicated this curse?

We stock slow movers because customers want them, albeit..

Lead Time Matters

American businesses have made dramatic headway at reducing their lead-times to supply customers. In B2B and especially B2C channels customers now receive products they want far faster than just a few years ago. In B2C online selling Amazon continues to set the standard while pushing this envelope to ever smaller delivery times. Other online sellers compare themselves to Amazon with envy and strive to achieve similar results. Most fail..

Free Shipping

OK, Amazon has made believers of us all. They’ve grown to a market cap bigger than Walmart and their shipping approach gets a lot of the credit. (Interestingly their low earnings gets blamed on their shipping approach too.) Yet Amazon’s latest announcement, limiting the number of Prime family members, goes to show that the jury’s still out on a winning strategy. We suspect that the jury will never..

Same Day Delivery

Doesn’t it make sense? There’s lots of stuff we want soon, like today – that new high-tech gizmo, medicine we just took the last of, the how-to business book we plan reading tonight to get a leg up on the competition tomorrow. Ok, we don’t need everything today, but enough of us want “some things” today that it makes a market…a set of customers that want their stuff today badly enough to pay a little extra.

Consumers don’t plan; we’re..