CONFIRM THE SUCCESS
Step 7—Audit The
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,
Step 8—Measure and
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.
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
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
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