Anybody that knows me can tell you two things about me right away. One is that I travel a lot and the other is that I love cars. All you have to do is look at my garage, and even my cubicle, and you can see the interest. I have pictures of vehicles everywhere that I’d like to own.
On a recent vacation with my wife, I experienced what can only be described as a ‘missed opportunity’ that I could directly relate to inventory management. More specifically, excess inventory.
We had flown to Las Vegas where we had planned on spending a couple of days, followed by six days of driving throughout Arizona and California. Being a car lover, I had arranged for a rented convertible but, given six days and two people, one with enough room for luggage.
When I went to pick up the car, I was offered an upgrade to a Corvette convertible. You can’t describe the look on my face as I realized that this was a wonderful opportunity and, at the same time, one that I had to turn down. You see, two backpacks, one duffle bag, and one largish suitcase just won’t fit in to the trunk of a Vette.
There really wasn’t any need to discuss the situation until I began to evaluate our ‘inventory position’. Unfortunately, I had left the packing to the ‘Manager’ and didn’t have any visibility in to the ‘on-hand’ articles.
Had I have had the foresight, and visibility, I may have questioned the need for six pairs of shoes when we were only planning for 8 days ‘production’. I may have questioned the ‘carrying cost’ of a hair dryer when there is generally one supplied at each stop. In hindsight, I may have even suggested staff reductions but, we were too close to an anniversary.
Ultimately, I had to take responsibility for not keeping a close eye on our inventory position and subsequently missing an opportunity. I should have had the foresight to put tools in to place so that I could review our on-hands and possible make recommendations. I did not manage well initially and ultimately paid a price. Next time, something is staying home…….
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great analogy! All car lovers can relate to your story. If you had considered different scenarios before you went to rent your car (will I be able to upgrade? , or on the flip side…no car) then maybe you would have left the shoes behind. Mind you..you don’t mess with woman’s shoes!
Funny. Visibility is key to inventory managment, but it seems less important when an abundant capacity exists. I wonder if “Scrapping” your excess inventory would have been worth it for the chance to drive a Corvette? I guess if your cash flow was stable, then you could always purchase new stuff later. And who doesn’t want new stuff, right?
Well written. I will forward this story.
In addition to considering the excess level of inventory, one would need to consider the configuration of the storage location and the dimensional-flexibility of the various items to be stored (in a suitcase of specific dimensions the space utilization may be not optimal, however, disaggregating may yield better utilization. (Even the problem with the initial storage may be overcome initially by more than one trip depending upon the time available and cost of transportation providing additional time for the development of alternatives and creativity. “Darling it would just be simply awesome to be driving with my lovely bride in a Vette convertible for all the world to envy my good fortune!”) Finally, it is not inconceivable that not all of the inventory would be required at all times during the period and one could “reduce waste” (and fuel mileage) by determing the specific requirements for the each stage 6-day cycle and arrange for alternate transportation. to the point of use on a JIT basis.
well said. It is pity we all are still not serious on controlling unproductive expenditure which are major attributor to profit & loss of a company. Time and market has now changed drastically. margins are very low, markets are very competitive, customers’ expectations and requirments are changing very swiftly. It is only needbased i.e., exactly as per the requirement inventory that can add or mar future prospects. Excess inventory not only eat up precious space but also put break on the invnestments on innovation whereas low invnetory directly hit business.