On the right track

Individuals with a very clear career path plans ahead on how they would want to achieve their goal. Part of it is being able to manage different areas in the organization that he sees fit in helping his career mature, and opening an opportunity to develop new skills. In order to be on the right track, you should have a basic approach in managing your new assignment. I have been in this scenario many times and here the top 3 areas that I consider in running a new department (in a perspective where the overall company objective has been reviewed and understood).

1. Organizational Structure - important to understand the roles and responsibilities of each function, align their expertise on the current role, rationalize resource allocation, and look at any redundant function. The objective here is to ensure that you have the right person, right skill, and right function in order to yield optimum results. It is important to have a well structured team in order to be more effective in achieving its objectives.

2. Develop/Review Key Performance Indicators (KPI) -establish your KPI that will align to your company's overall objective. Specific measures in your key processes must be defined to address your performance objectives. All metrics must be cascaded to your team for common understanding. Make your KPI visible to your team members, and review it every day and take action on areas not meeting the target. If you want to be on the right track, it's best that you define where you will focus to achieve your goal.

3. Review Process Gaps - understanding your process is a good way to start on where you will focus your attention. Perform a Value Stream Mapping in order to identify process gaps. Perform Root Cause Analysis, and develop preventive solutions. Always review your processes based on the need and trend of your business.

There are other ways to approach in managing a new role, this works for me. I guess key is to set foot on the right direction and be clear on your objectives. At the end of the day it is the result that matters.

Putting Inventory Control in the Organization

A question was posted in LinkedIn on where to put Inventory Control in the organization, should it be under Finance, Planning, or Warehouse? Below was my response to this question.

Inventory Control Group being an integral part of the Materials Department is part of the Operations Group. However, this group must be independent in the sense that they serve as the auditing body of the Team. Putting it in Planning group will compromise the inventory and the way ordering is being managed, Putting it in finance is not a good idea as Finance does not have the resources to manage inventory, and it is outside of their scope, reporting to Warehouse group will also create bias as integrity in cycle count will be compromised. It is best to create an Inventory Control Group, reporting to the Materials Manager. The basic role of the Inventory Control Group would be:

1. Manage cycle count
2. Perform Variance Analysis
3. Monitors Material Accuracy
4. Audits business processes affecting Inventory such as, receiving transactions, picking transactions, managing of defective parts, warehouse processes, and others.
5. Ensure that MRP system inputs (inventory) is correct.
6. Monitor inventory status and ensure compliance to Net Inventory Turn Over.
7. Coordinate with planning and warehouse operations re discrepancies found in the process affecting material accuracy.

Depends on how your business is run, you can opt to do a cycle count based on parts classification. Others do a monthly four wall count, while others go for a daily cycle count, based on the complexity of the product and the amount of parts being managed.

To add up, Inventory Control by all means is something that is very critical in the operation. It is important that system transactions from the time materials are received until it is delivered to production, and shipped to customer must be accurate. As the saying goes, "garbage in, garbage out".. We wouldn't want to mess up the inventory, otherwise, you'll end up having excess and shortage disrupting the whole operation.