Inventory – A Historical PerspectiveInventory Optimization & Management
How about arrows and arrowheads did one need? How many should one carry? They will inevitably break or be lost? How many should be in reserve back at the hut or cave?
How about flint? Did it make sense to keep a stock of flint stones in the corner of the cave to convert to arrowheads, spearheads, or knives as needed? Or did it make sense to keep a reserve of the finished goods? How big did the pile get before the cave spouse began to complain about cleaning up that excess?
With the advent of fire, the gathering and storage of fuel became a concern especially in climates that had four seasons or significant rainy seasons. How much wood to store to provide an adequate supply during the winter or rainy season? Where to store it to keep it dry? The best of our ancestors probably even developed a rudimentary FIFO so they were always using the oldest and most seasoned wood first.
Let’s fast forward all the way to the time of Charles Dickens (1812-1870). At this time of year one can easily watch any number of makes and re-makes of his famous novelette A Christmas Carol. Inventory management and A Christmas Carol? Well yes. While it is not central to the story, young Ebenezer Scrooge apprenticed at the warehouse of one Mr. Fezziwig. Scrooge’s sour disposition was probably due in part to his inability to forecast accurately, manage his working capital, and still provide good customer service. Bah Humbug!
Inventory management is nothing new. It was probably just simpler because of the very small number of items to store and plan around. It drove Scrooge crazy and what could possibly have been stored in Old Fezziwig’s Warehouse 50 maybe 100 SKUs?
Anyone can manage 1 item. That is not so hard and a shortage here or an over stock there will not cripple one’s pocketbook. Effectively managing 500, 5,000, or 50,000 SKUs…. Well, that requires disciplined and intelligent professionals operating within well defined business processes integrated with state of the art software for Demand Planning, Materials Resource Planning, Warehouse Management, and Order Management.
We wish everyone a 2009 of health, happiness, and optimized Inventory Management for one and all.