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iomnet
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System Administrator
Total Posts: 87
Joined: 12 Feb 07
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I work for a mailing house and one of our clients is asking for us to maintain our stock database to 99.9% accuracy at all times - this seems really unreasonable to me - we have never achieved anywhere near this - in part due to what we are handling - ie bits of paper which come in from printers with a +/- 5% tolerance on what they declare they have sent....you wouldn't have anything you could send over or links to good sites which would give me something to start working from on what is reasonable etc... I'm googling at the moment - but it's a bit of a mine field trying to find something that's reliable! Would much appreciate any advice you could give!
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iomnet
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System Administrator
Total Posts: 87
Joined: 12 Feb 07
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It seems there is a client that does not understand the basis of inventory management. If the printing trade work on +/- 5% on print runs that is a clear indication that 99.9% inventory accuracy is not achievable. Also the cost of the printed items will be relative small so again 99.9 is not a reasonable level - unless the paper is a bank note!!
Duncan
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iomnet
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System Administrator
Total Posts: 87
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I advise you to read the Oliver Wight literature. It is ridiculous, as you suggest, to arbitrarily insist on a precise accuracy level for inventory. However, most of the literature indicates 99% accuracy as an acceptable minimum.
Below is the Oliver Wight link.
http://www.oliverwight.com/
Best Regards
Keith
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iomnet
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System Administrator
Total Posts: 87
Joined: 12 Feb 07
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Whose stock is it - yours or theirs? They probably want to be 99.9% sure you will deliver to a promise, then it's up to you to work out how to do that.
I think you would get much further by discussing what they really want, or how they define stock accuracy. It is probably a proxy measure for reliability of delivery.
It is probably more important to be 100% accurate on knowing you have some
of an item. If you only have 95% certainty of how many you have that
might be less important? I am 100% certain you have some stock.
It is not unusual to insist on high levels of data accuracy. Think how many lines (accounts) your bank deals with, all with transactions coming and going all the time - what level of accuracy would you ask for?
hth
Steve
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iomnet
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System Administrator
Total Posts: 87
Joined: 12 Feb 07
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Assume means the stock accuracy physical performance (i.e. Actual there from counting / Expected as per Stock records)
Whilst the goal is always 100%...for reality this is often graded with "accepted" tolerances... as example:
A items 95-98%
B items 90-95%
C items 85-90%
Obviously there is no universal figure!
(Stock Control is fully covered in my book "Excellence in Warehouse Management" published by Wiley)
Best Wishes
Stuart
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JM
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Forum Member
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Joined: 15 Jul 07
Member #8
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Hi
You must always bear in mind that there is a cost to "service".
With any contract, agreement when buying a service to deliver to your customers you also buy your service levels. If you want 99.9% service this would/should always be:
a) discussed between the 2 parties as part of the negotiations
b) added into the cost of services offered by the provider.
To achieve 99.9% it may cost you 2 extra people to double check all orders received / processed / picked and despatched. Therefore, this may be the cost to you of agreeing to & delivering 99.9% service. If you do not cost this into the price of th services you offer then you are not accurately budgeting you P&L on this piece of business.
If you have penalties against failing this then in the longterm you may find the account in question is not actually worth keeping.
I work to 99.7% of total volume (UOM) being delivered / receipted over 3 months. Anything below this deserves an operations review meeting. Depending on the volume in question you may agree to then invoice for a
%age of the lost inventory.
I appreciate many businesses do it different ways.
JM
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Chuck Intrieri
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Forum Member
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Joined: 16 Jun 11
Member #232
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Quote: iomnet, Friday, 29 Jun 2007 17:52Assume means the stock accuracy physical performance (i.e. Actual there from counting / Expected as per Stock records) Whilst the goal is always 100%...for reality this is often graded with "accepted" tolerances... as example: A items 95-98% B items 90-95% C items 85-90% Obviously there is no universal figure! (Stock Control is fully covered in my book "Excellence in Warehouse Management" published by Wiley) Best Wishes Stuart
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Stock Database Accuracy Question
29 Jun 2007, 17:49