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Finish Good Inventory Process

Six Sigma – iSixSigma Forums Old Forums General Finish Good Inventory Process

Viewing 13 posts - 1 through 13 (of 13 total)
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  • #29470

    Efrain Obeso
    Participant

    Hello, I’ve a project to eliminate the monthly inventory value adjustment that generate a variation in the levels of the inventory.
    Can somebody help me to start this project?
     

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    #75562

    Adam L Bowden
    Participant

    Hi,
    Sounds like you have a typical problem.
    1) Institute Lean (Kanban, Visual methods) etc.
    2) Check your counting methods – check the counting method accuracy – you might be supprised how incapable it is.
    3) After puting in Kanbans stop using the MRP to launch/cancell your purchace/production orders – just use it for long term material forcasting
    4)Check how much inventory is being scrapped and not accounted for.
    There are a lot of drivers affecting your inventory levels – you may even find that you’re sending out the wrong things from FG inventory.
    If you want to go low teck – use lean methods.  If you want to go hi-teck then use lean methods and also use “Radio data terminals” to provide real time inventory control – this will near eliminate your defects & variation.
    Adam 

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    #75567

    Ashok Sarkar
    Participant

    I thing first you introduce the basic discipline which will help you. Yoy may do an FMEA backing with Process Mapping and GEMBA Investigation.
    Generally this problems are human related.
    Ashok

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    #76448

    Mary Crowdle
    Participant

    I am interested to hear why Adam Bowden suggests ” to stop using the MRP to launch/cancell your purchace/production orders – just use it for long term material forcasting”
    I have just started on a 6 sigma black belt course and within my organisation I have been allocated to look after Inventory. We currently have to reduce our inventory levels and improve our stock turns by 3 fold by the end of the year.
    I have a gut feeling that part of our problem is that people do not understand how their actions and information fed into the SAP system affects inventory and reorders etc and therefore they all blame the system.
    Have you experience in this area that might be able to direct me in my task?
    Mary

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    #76471

    Adam L Bowden
    Participant

    Hi Mary,Call me to discuss how I can help.
    720 733 3737 (Denver, Co)Adam

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    #76499

    Mary Crowdle
    Participant

    Adam
    Delighted to see that you replied to my message. Unfortunatly I am having difficulty getting through to your phone number. I am assuming that you are in the USA – correct? If this is the case I am unable to contact you on the number supplied. Is there another one I can use?
    Mary

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    #76500

    Adam L Bowden
    Participant

    Hi,
    If you’re having difficulty e-mail me your phone number and I’ll call you direct. My e-mail address is [email protected]
    Best regards,
    Adam

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    #76502

    TCJ
    Member

    Efrain,
    Start by defining the issue by creating a detailed problem statement with input from stakeholders.  Beware of “knowing” what the issues are, get out there and interview the people closest the process.  Then validate your measurement system via MSA.  Analyze the problem using activity and deployment flowcharts, FMEAs and the like.  Select improvements based on findings from analyses and implement controls.   

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    #76503

    Adam L Bowden
    Participant

    Mary – I see the error  – my number is 720 332 3737 – I made some typo’s.
    Adam
     
    Adam

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    #76521

    Joe Brankin
    Participant

    Mary,
    I don’t know how relevant my project is to yours, but we build a highly configured product using the SAP variable configurator, and are experiencing high levels of finished goods inventory that does not ship as soon as it is ready. The system is set up to plan for despatch 2 days after completion, but the mean time is in excess of 5 days, with a very wide variation.
    Using Process mapping, C&E amd FMEA, we have been able to determine that the main problem lie’s within the scheduling/sequencing of the product, especially where products from several lines with differing process times should consolidate on the same container.
    Further to this, many of our units are cleared to build but are not cleared to ship financially, due to incorrect triggering of ‘Letter of Credit’ processes etc.
    From an MRP perspective, SAP has allowed reduction in inventory, but lead times of purchased parts needs to be reviewed constantly, and as pointed out in previous correspondance, people may not fully understand the consequences of feeding inaccurate info into the system.
     
    JB

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    #76536

    Roz Moore
    Member

    Mary:
    You might want to look at combining your Six Sigma tools with some Lean tools.  Possibly what Adam is suggesting is something that I have implemented. 
    We also have SAP, but in our molding area we implemented a Signal Kanban System that drives our production orders and drives the level of inventory of finished goods that we carry.  SAP is only used for planning of the raw materials.
     
     

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    #76574

    André Luís Façanha
    Participant

    I suggest that you invest in APS to reduce your level of inventory, because this generation of systems has finite capacity, consider constrains and use many mathematics models to optimize the production plan while SAP can not do it with the MRP system.
    Best Regards.
    Façanha

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    #77016

    Dewi Lloyd
    Participant

    The only advice I can give is not to treat the symptom, but rather the cause; that is, forget about specifically  reducing inventory, and achieve results through tackling the root causes.  The two most obvious problems are:
    (1)  Failure to reconcile customer requirements with planned production/replenishment.  That is, if there is anything you can do to make sure that the “voice of the customer” is listened to, then all the better.  By making what the customer really wants, we can reduce stocks.
    (2)  Operate inventory management in real time.  Many outdated systems collate data weekly or even monthly, generating MRP plans that are out of date at th point of use.  By collating data regularly (such as EPOS in supermarkets)   and communicatingthis back to suppliers quickly and regularly, we reduce “Forrester Effect” and thus inventory itself.
    Dewi Lloyd
    Birmingham, UK.
     

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