Idea Inventory Management - Watch in HD

New ways to reduce inventory. Inventory reduction can immediately put more cash in companies pockets. Manufacturers, distributors, and retailers are forced to choose the approach they hope will make them the most profit. Is it producing and making goods available
•to forecasts of expected consumer demand, or
•by reacting to what consumers have already bought?
Conventionally, companies use the former approach. In what we term a Push system, product availability is based on forecasts. Companies forecast to feel confident that the goods they buy, sometimes many months in advance, will both find willing buyers and not run out unexpectedly soon. In the Push world, decision points occur at every reorder. How much should be purchased? In other words, how often is it necessary to consider buying each item? In their attempts to prevent stock-outs and protect sales, managers end up with fewer inventory turns than they wish. Pushing inventory downstream through the links of the supply chain is a response to the natural desire to reduce inventory over-investment, as well as to record sales today rather than later.
In contrast, a Pull system controls the flow of products by automatically adjusting inventory levels according to actual consumption. Pull systems simply respond to what consumers buy. A Pull system manages time buffers of inventory for each item. These buffers act as shock absorbers, which are compressed as inventory is consumed until replenishment can occur. For each consumption, an equivalent order is placed, an approach that lends itself to automatic electronic processing. Replenishments are frequent, in the smallest economical batches. Decision points in Pull systems are triggered only occasionally, to resize buffers, when on-hand inventory levels consistently correspond to too little or too much protection time.

Category:

Education

Tags:

• Inventory
• Buffer
• Management
• Theory
• of
• Constraint

[yesidare]

good.... 

[Fishbowl4QB]

Nice video. The resolution isn't the best though.

[bumos]

a dee das lol sounds funny how he says it

[HFCamp]

This is the holy grail for any company that holds physical inventory. It make the most difference for retail chains with physical stores. Then for retail marketers, importers, distributors, make-to-stock manufacturers and finally make-to-order manufacturers. It is all about flow - keep goods flowing.