Procurement/Inventory (Supply Chain)

This is one of the areas that requires a lot of attention, as it has the ability to produce significant road blocks and expenses.
Supply chain has the potential to make you go broke in a hurry if it is not managed and incorporated into the core part of how you run the business.

Often the process can be too rigid, also the purchaser and inventory person have completely different functions, skillsets and/or ideas of which some are ignored, and/or misunderstood. It is essential that these two functions are in-sink with production or the service that a company provides, resulting in many functionality problems.

  • Does the purchaser purchase 100 of X because they got a good deal when they will only use 25 in the next three years? Is the cost of doing so understood?
  • Are Y product requested and X is provided because it is cheaper?
  • Is the purchasing decision based on price and not service?
  • Is a product required tomorrow and it was ordered with a 3 day delivery because it would have cost an extra $20 for shipping?
  • Is the purchaser in sync with the department that uses the part?
  • Are products ordered and not followed up on?
  • Are the product ordered and the information not shared with the receiver, inventory, or the department that needs them?
  • Is the shipper in sync with the daily activities and their pipeline?
  • Are parts being pulled off the shelf and not being recorded?
  • Does the inventory person build and fill BOM’s and are they ready?
  • Are PN’s applied to every part that can be seen when they are received and stored?
  • Are parts pulled, assigned a job number, and then delivered?
  • What type of part numbering system is used; smart, or lineal?
  • Are departments, services or customers always waiting?
  • Does the shipper understand timelines and limits long conversations with others when they are out for delivery?
  • Is the inventory person able to pull up the cost and price for a given component?
  • Are stock counts done, or done regularly?
  • Does every part have a cost and price?
  • Are common and consistent price mythology practices used? (FIFO or average costs)
  • Purchase Incorrect Product

Does the purchaser purchase 100 of X because they got a good deal when they will only use 25 in the next three years? Is the cost of doing so understood?

Are Y product requested and X is provided because it is cheaper?

Is the purchasing decision based on price and not service?

Is a product required tomorrow and it was ordered with a 3 day delivery because it would have cost an extra $20 for shipping?

Is the purchaser in sync with the department that uses the part?

  • No Follow-Through on Orders and Deliveries

Are products ordered and not followed up on?

Are the product ordered and the information not shared with the receiver, inventory, or the department that needs them?

Is the shipper in sync with the daily activities and their pipeline?

  • Product Not Being Pulled to Orders or Signed Out at Appropriate Intervals

Are parts being pulled off the shelf and not being recorded?

Does the inventory person build and fill BOM’s and are they ready?

Are PN’s applied to every part that can be seen when they are received and stored?
Are parts pulled, assigned a job number, and then delivered?

What type of part numbering system is used; smart, or lineal?

  • Late Deliveries

Are departments, services or customers always waiting?

Does the shipper understand timelines and limits long conversations with others when they are out for delivery?

  • Costs Not Being Capture

Is the inventory person able to pull up the cost and price for a given component?

Are stock counts done, or done regularly?

Does every part have a cost and price?

Are common and consistent price mythology practices used? (FIFO or average costs)