Posted by Nelson de Witt on October 30, 2009 under E-Book | Comments
Inventory Management
Managing your inventory can be the most difficult and most important part of the process. It is a challenging because it means people have to adapt to a new way of doing things. It is the most important part of the process because it keeps your inventory information current.
Managing people
Whenever people change the way they work they are really changing their habits. Generally speaking, people do not like this type of change. They might fight it or forget that there is a new system in place. It is important that they know how important this is and that you make them stick too it.
When helping SBC in Panama the owner did not like the new inventory system at first. He liked the efficiencies it gave them but he had to adapt to the fact that he could not go into the inventory room and take whatever he needed. This does not work when you have a system of inventory that a group of people rely on. Getting him to understand how important this was and to change his habbit was a lot of work.
Complete buy in is important. If its not clear that is is a new direction and that the business needs it then people will be lazy about it. It is important to be strict at first while people are adapting. Later on you do not need to be so demanding of them. However if things get messy or out of hand make sure you remind them how important this is.
Managing information
Unless you have a completely automated system this part of the process is where the digital information and the physical good meet. It is up to the people who work in the inventory room to keep track of any changes that happen. Let things go unclecked and quickly your inventory system is useless. It is just like sweeping the floor or cleaning up the shop. It is a chore that has to be done for everything to run smoothly.
During this process it is important not to force them to do something that takes a long time. If it takes more time then the old way they will not stick with it.
Whenever an item is added or subtracted from the psychical inventory the changes must be made on the computer as well. It helps if the inventory system has a process for handling this. In the inventory systemn that was used at SBC the workers first selected packages to be removed and then removed them as a batched task. Every time one was removed it was marked down in the computer.
Occasionally people should check to make sure the physical inventory matched the computer inventory. This is something that could be done once a year.
Up next:
Next week I’ll be going into detail about the physical process of storing inventory.
This post is part of a series that make up the Effective Inventory PDF e-book. You can read more posts that are part of this book by clicking on the EffInv tag. New posts will be added every Friday, so subscribe or check back for more
The import thing is testing. While one might have an idea of what will work there is no way to know until it is tested.
This may seam obvious but there are often times in business when we forget this. Rolling out new application or IT systems is can be one of these times.
When a group in the businesses needs a new technology to solve a persisting problem they are presented with a number of options. Sales reps might be brought in to talk up their product. Then the company picks one of these programs to roll out to its employees. They send people to get trained on the new system. A few months later after data has been converted people start to realise that the software isn’t exactly what they need. Its no wonder a lot of money is wasted on these type of projects.
What happened to testing? I don’t mean testing the software to see if its compatible with your systems. I’m talking about testing it to see if its compatible with your people. Put the software in front of someone and watch them struggle through it to make sure it’s what they need.
If your employees can’t use the software or it doesn’t do what they need it too then you are headed for trouble. No amount of training or mandating is going to get them to fully embrace it.
The good news is the cost to roll out software to a small group of people is so small that you really have no reason not to. Oh and any company that makes buy before you try, just move on. There is too much software out there to waste your time (and money) with those folks.
Traditionally non-profits have done the most work to drive social change. Many of them have had a great impact on the world but they are not always the most effective way to deliver that change. We are starting to see that business can impact change, good or bad, much faster than traditional non-profits could. Maybe we need to rethink how we deliver social change.
In general they rely on donations to fund their efforts. While this has worked for many years there is a limit to its effectiveness. If a non-profit wants to double the its impact it has to raise the money to do so. Compare this to a business. If a business wants to grow it needs to find more people to serve.
I think the misconception is that an organization should not make money off social change. This raises the questions: Why should social change not be profitable? If it was, it can be self sustaining.
Another area I have seen non-profits struggle with is internal efficiencies. The reason for this might be that non-profits feel the money coming in should be used on its efforts and not on itself. In a business companies looks to lower costs so that they can get more money from products or services. Why can’t non-profits be focusing on lowering costs to deliver more social value?
This is one reason I like the idea of social entrepreneurship. To me it is about delivering social change by using business principles.
I want to be clear that I am not saying non-profits are bad or that do not have there place. I think they do great work but maybe its time to rethink how they drive change. Call it non-profit 2.0.
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