Case | Improve the inventory accuracy

Problem

The inventory management of a production company does not run as hoped-for. The registered inventory in the IT system is systematically not aligned with the actual inventory stored in the warehouses.

The production company yearly organizes multiple stock counts. This results in correcting the registered inventory in the IT system to the numbers counted. Nevertheless, differences between the (theoretical) inventory in the IT system and the physical (actual) inventory in the warehouse quickly arise. As a result, optimizing the inventory levels, saving money, steering the production planning and reporting the financial value of the inventory become harder.

In order to regain control, the company’s management contacted horsum.

Results

By interviews, data analyses, brainstorm sessions and stock counts, horsum obtained an overview of the root causes of the inventory differences.

For the most important root causes, horsum defined -in cooperation with the involved employees- action plans. These action plans included work instructions, preventive and detective controls, adjustments to the IT system, reorganization of inventory locations and an improved inventory reporting.

These action plans were implemented in phases. During this roll-out – which lasted a couple of months- follow-up and evaluation meetings were organized. This allowed horsum and the involved employees to keep focus throughout the entire improvement project and to adjust where needed. 

Cédric Verfaillie - January 3, 2016