Improving Inventory Record Accuracy - Oliver Wight Americas
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Information for Members of the Warehousing Education and Research Council NOVEMBER/ DECEMBER 2009 In this issue... NAFTA: Sixteen Years Later 6 The North American Free Trade Agreement has yet to deliver as promised. Improving Inventory Record Accuracy 8 Cycle counting maintains greater inventory record accuracy. At WERC 10 Member news and events. 2009 WERCSheet Article Index 11 A listing of all articles printed in WERCSheet during 2009. Loud and Clear Voice technology continues to find new inroads to the logistics industry. While the economy has taken its toll on the sales of most types of tech- nology serving the distribution industry, one has ridden out the storm fairly well—voice. For many companies looking to enter the technology arena, voice has offered the lower price point that allows them to do so. Marceline Absil, vice president of marketing and sales at voice technol- ogy provider topVOX, based in Barrington, Ill., says that voice is an easy fix in an economic downturn. “For a small investment, companies can optimize operations,” she says. “We’ve seen a bit of a slowdown, but many companies are looking to put voice into their 2010 budget.” Voice has made its way into a variety of verticals thanks to its easy imple- mentation, low cost of entry and rapid return on investment. In particular, the food and beverage industry has made it a favorite choice. “With such low margins, the food and beverage industry needs technology that gives them a big return,” says Absil. “If voice can save a company 10 seconds per order, that’s a big savings right there. It’s a great match for frozen and chilled environments also because it is hands-free.” Picking is the first and most obvi- ous place to install voice, but many DCs are finding uses for the technol- ogy all throughout the facility. “Picking is the first place to install voice because you get the fastest and largest ROI there,” Absil explains. “But it also fits with putaway and many other applications.” Safety Stock: How Much Is Too Much? Determining how much safety stock to keep on hand is always tricky business, but even more so during tough economic times. One of the many results of the recession has been the drop in demand for products of all kinds. People are simply buying less in an effort to keep more money in their pockets. Store shelves require less replenishing, manufacturers are producing less and fewer raw materi- als are in demand. Clearly, this has an impact on how much inventory companies need to carry. Safety stock, in particular, is often a tricky calculation, compounded by changing times. In general, managing safety stock is not a strong point for many companies. A recent study conducted by Executive Inventory Management (EIM) for the National Association of Wholesale Distributors (NAWD) found that many companies fall far short in this arena due to poor forecasting skills. According to Jon Schreibfeder, president of EIM, the study revealed the mean average forecast error rate to be 642 percent and the median forecast error was 380 per- cent. “It didn’t matter what size company, what industry continued on page 2 continued on page 4 “Picking is the first place to install voice because you get the fastest and largest ROI there.” Marceline Absil www.werc.org
