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800 Pound Gorilla

What is an 800 Pound Gorilla?  Well as this blog is not about biology or animal species it is safe to assume we are not talking about the Western Lowland Gorilla, the Eastern Lowland Gorilla, the Mountain Gorilla, or any [...]

Operational Definitions Part II

In part I of this two part blog we discussed Operational Definitions and how specific words, terms or concepts can have a distinct meaning in a specific organization or business and how people must be aware of this when communicating [...]

Operational Definitions

Operational Definitions were a large part of what W. Edwards Deming used to advocate in his teachings. Chapter 9 of his book, Out of the Crisis is dedicated to this concept. “Operational Definitions, Conformance, Performance.” In the opinion of many people [...]

What is Activity Analysis? Part 4, The People Dominant Process

We believe that inventory is the final arbiter of supply chain performance. To get it right takes more than just good clean data and using the proper calculations for Demand Planning, Inventory Sizing, and Manufacturing Planning. It requires well conceived [...]

What is Activity Analysis? Part 2, Warehouse Layout and Re-Layout

Last week we posted a blog about Activity Analysis, we learned this is basically the task of delving into and capturing the complexities and nuances of whatever complex process you are attempting to manage or improve. Now let us consider [...]

What is Activity Analysis?

In the world of Inventory Management, there are many classes of inventory. A key component of a robust inventory management process is to define, segregate and measure, from there we need to develop and implement action plans by the various [...]

The Taught String Theory

In the April Issue of our newsletter we introduced our “Taught String Theory” which illustrates how effective data sharing can integrate the demand and supply processes of customers and suppliers—as if tied together with a taught string. We are including [...]

Four Strategies to Help You Meet the New Normal, Head-On

Back in January we posted our Supply Chain Resolutions for 2011. In our March newsletter, we shared our four improvement strategies for the remainder of 2011. We are posting them here for those readers that do not receive our monthly [...]

Practical Guide to Contingency Planning

We recently posted a blog, “The Crisis in Japan & the need for Contingency Plans”, and have had a few inquiries for more information on contingency plans. Allow us to expound a bit on our view of contingency planning. There [...]

A Quick Inventory Opportunity Assessment

When we meet with a company for the first time, we like to ask three simple questions to allow us to make a quick assessment of their inventory status.  We ask: What is your revenue and gross margin? What is [...]

Don’t be Naive About Inventory Management

For the first part of this posting, you have to pretend that it is 1975 and not 2011. You are given a mandate to reduce inventory by 10%. The totally naive thing to do would be to cut inventory across [...]

Variation and Inventory

No one wants to hold inventory. It is necessary because of variation: variation in demand, variation in lead times, variation in raw and finished good quantity, variation in yield (production line reliability), variation in transit times, and of course random [...]

The E&O and Inventory Turn Relationship

At DemandCaster, we are dedicated to helping small- to mid-sized manufacturing and distribution companies better manage their planning and inventory. We try to do that using simple concepts, intuitive tools, and straightforward processes. In our work with clients, we have [...]

Inventory as a Percent of Sales

If you are focused on optimizing inventory, another useful measure of inventory or working capital is the ratio of inventory to sales or inventory as a percentage of sales. It is a very simple and easy to calculate KPI. It [...]

How Much is Increasing Inventory Turns by One?

There has never been a good answer to this question. We have asked our partners in finance and they just gave us a blank stare and did what finance people always do. They asked “Why do you want to know [...]

Inventory Averaging

In our blog posting, Draining the Inventory Pond, one of the companies that we are familiar with has the end of quarter spikes referenced in the posting. In some of their operating units, up to 30-40% of their quarterly sales [...]

Draining the Inventory Pond

Public companies, as we have noted, are required to report financial results quarterly. They do so by making public their Income Statements (P&L), their Balance Sheets which includes inventories, and their Cash Flow Statements. These statements are released quarterly and [...]

The Absorption versus Inventory Balancing Act

At DemandCaster, we always testify that inventory is the ultimate measure of supply chain performance.  Some days we will even say that inventory is the ultimate measure of business performance.  We do not say this lightly.  Right sized inventory and [...]

Optimizing the Cash to Cash Cycle

In the Supply Chain, we worry about service, inventory, and execution.  Do we have the right products, in the right place in the right quantities at the right time?  Are we doing it at the right cost?  Lastly, we are [...]

Tampering: Demand & Inventory Planning

Last week, we posted a blog re-introducing Deming’s concept of tampering.  This week we will explore the how tampering creeps into demand and inventory planning. In the case of demand planning, tampering occurs when we simply think they are smarter [...]

Tampering: What is it? Why is it bad?

Tampering is concept that W. Edwards Deming popularized and used often in his lectures.  It is an important and yet subtle concept that many Supply Chain professionals and general managers still do not fully get.   Tampering is basically trying to [...]
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