CONFIRM THE SUCCESS

Step 7—Audit The Process.

Cycle counting is the final exam of the eight-step process introduced here. The purpose is to validate that the methodology that was just implemented is working and that the procedures are being executed perfectly every time. Cycle counting allows you to fix the process of inventory control, not to merely fix the on-hand balances. The sole purpose is to identify' the root cause of the inventory integrity prob­lems and then to fix them. The objective is not to simply adjust the on-hand balances. In fact, counting and fixing balances, without process improvement, is a waste of time, money, and energy.

Step 8—Measure and Publish Performance.

Making rapid progress in the level of inventory integrity is a function of measuring the performance and then publicizing it to make every­one aware of its importance. It has been demonstrated many times thai when the results are posted, there is a renewed sense of urgency to increase the level inventory accuracy. The daily, weekly, and monthly results need to be promptly and prominently displayed throughout the organization. Posting the names of the responsible parties next to the metric lets everyone know whom to compliment when success has been attained.

MANAGING PROJECT RISK

When we look at all the companies that have attended our public in­ventory integrity courses over the years and review who has used the information to achieve great results, the number is all too small. When we further inspect the results that we have collected from these compa­nies in interviews we conduct at regular intervals after they attend the course, we find that there are common reasons for the "less than ac­ceptable" results.

It is important to understand, first, that there is inherent risk in­volved in any project. The further you are stretching the envelope and the more people and departments who need to participate, the higher the risk. While inventory integrity is truly a "company" project that involves many departments, most of us would not consider it to be stretching the envelope too far. As a result, we often do not consider this to be a risky project and do not go into it expecting the significant problems that result. The message of this paper is to be aware of what you are up against.

Our data shows the following five risks to be the most common ones that inhibit companies from achieving 95 to 98^ f percent levels of inventory integrity. Use these items as a mini-risk survey. If you cannot say that you have at least four of the five under control before you begin, then this author must recommend that you hold back on starting the project until you have addressed the five up front. The author also suggests that these risks need to be revisited at the begin­ning of each and every weekly project team meeting so they never come back to surprise the team in midstream.

Risk Number 1

Senior management was never totally committed in the first place.
They did not attend regular review meetings and did not deal directly with the tree-huggers and organizational alligators that stood in the way of progress.

Risk Number 2

The team did not have the necessary experience. Either the team leader had never traveled the road before or he/she was not an experi­enced project manager. As a result the project did not have the ability to be effective in a climate where resources are few and time is scarce.

Risk Number 3

Time was never allocated for the project, it starts with establishing the initial priority by developing a compelling financial case for the project. The president must be involved at the outset in establishing the priority and approving the 90-to-120-day plan of attack. With that approval must come the focus on hitting all the intermediate project dates. A company that tolerates project slippage on one project will probably tolerate it on all projects. It simply becomes a way of life, not having to live up to commitments.

To Be Continued