Original Date: 06/26/1995
Revision Date: 01/18/2007
Information : Inventory Control
Dayton Parts, Inc. (DPI) instituted a two-phase inventory control process in response to a large physical inventory write-off in manufacturing at the end of 1992. The first phase centered on efforts of a task force comprised of personnel from management, scheduling, accounting, and warehousing that was established to solve the inventory control problem. By late January 1993, this group had removed all inventory from the assembly area, taken a physical count of all material and organized it into an expense warehouse. The system was also converted from a Simultaneous Issue and Receipt process to a requisition process, including pre-kitting jobs for assembly operations using BOMs and the schedule needs of the assembly area. By strengthening communications between all departments and adjusting the scheduling of work, DPI reduced throughput time and alleviated bottlenecks.
The second phase of the project included re-organizing part of the factory floor layout, initiating daily cycle count spot inventories in the warehouse, and bar coding accessory parts in the warehouse.
Benefits from this two-phase inventory control process initiation include:
Downtime resulting from out-of-stock conditions for accessory parts has been eliminated; Throughput time of finished goods has been reduced;
The yearly physical inventory has been abolished; and,
A $46K yearly savings in material handling cost has been realized. This is in addition to a $199K reduction in inventory variance between 1992 and 1994.
For more information see the
Point of Contact for this survey.