Too much cash tied up in inventory
Cash sitting in parts nobody needs this quarter.
"We are sitting on too much inventory and it is eating our cash."
Inventory does not build up because people like ordering things. It builds up because the planning underneath cannot see across the plants, so every site protects itself with stock.
Fixing it is not a purge. A purge comes back. The planning has to be able to see the whole picture, and the people running it have to trust what it tells them.
On the same assignment at Positronic Amphenol, inventory held in house fell 29 percent while on-time delivery was climbing. Those two usually move together, in the right direction, or not at all.
Questions about this one
- Will cutting inventory hurt delivery?
- Done as a purge, yes. Done by fixing the planning underneath, the two move together: that is what happened on the assignment named above.
- Does this need a new ERP?
- Not usually. Most plants already own more planning capability than they are using.
The other five reasons people call
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The seat is empty
Your plant manager just left
The seat is filled while you find the right permanent person.
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Orders are late
You are missing what you promised customers
On-time delivery is the number your customers judge you on.
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The plant is behind
Your plant is falling behind
Safety, quality and efficiency, looked at together.
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The schedule slips
Your schedule keeps slipping
A schedule that looks right on Monday and is gone by Wednesday.
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The team will not move
Your team will not execute
Decisions get made where the work is, or they do not get made.
Let's talk about what is going wrong.
A few sentences is enough. What is late, what is stuck, or which seat is empty.