The Cascading Effects of Intelligent Inventory Management

Do you struggle to maintain the right level of inventory? 

The Goldilocks Dilemma: How the CPIM Enables Smarter Inventory Management

Inventory management is a little like the classic Goldilocks fable. Too much inventory burns cash, clutters warehouses, and complicates operations. But too little inventory is equally harmful, freezing a business in its tracks, killing sales, and damaging reputations.

For supply chain professionals, the challenge is navigating the delicate balance between too much and too little. But while Goldilocks eventually settled on “just right,” professionals today chronically alternate between “too hot” and “too cold”— a state of affairs that harms individual careers while imposing huge costs on an organization.

It’s no wonder, then, that inventory management represents a significant source of stress for many supply chain professionals. However, within that stress also lies opportunity for employees with the appropriate inventory management skillset. Pursuing the Certification in Planning and Inventory Management (CPIM) is a simple way to stand out and deliver immediate and quantifiable value within one’s organization.

The value of improved inventory management

How large is this potential value? While 2020 has upended traditional expectations when it comes to inventory management, historical data tells us that poor inventory planning costs U.S. retailers a staggering $300 billion in revenue due to the markdowns needed to sell excess product. It further reported that just 60% of all U.S. non-grocery sales are made at full price—evidence that organizations across industries slash prices to unload unwanted inventory and the associated costs of carrying it.

At the same time, however, too little inventory imposes similarly large costs. In the automotive industry, fines can be as high as $4,000 per minute for supply chain partners whose delivery failure causes production downtime. And while just-in-time inventory—a management strategy that aligns material orders from suppliers directly with production schedules—is optimal in theory, in the real world it’s nearly impossible to perfectly balance supply and demand. That’s true even in the best of times and especially so in the event of supply shocks and other unanticipated events.

Of course, inventory management is by definition an uncertain business, but strategies exist to harness that uncertainty and transform it into a competitive advantage. That’s where the CPIM program comes in to provide supply chain professionals with the knowledge and tools they need to increase inventory accuracy and improve forecasting abilities.

Strategies to improve inventory management

By undergoing the CPIM program, students gain a logical framework from which to approach inventory management. Students will learn, for example, “just-in-time” inventory management techniques, as well as tools and strategies for securing inventory without the quotes to improve inventory accuracy—in other words, for improving an organization’s inventory oversight, especially in times of uncertainty. This type of visibility provides a real-time picture of inventory levels that helps avoid materials shortages or the purchasing of duplicate items that kill lean inventory processes.

Similarly, CPIM provides supply chain professionals with insight into the basic factors that drive demand for inventory, allowing them to improve the assumptions that underlie their inventory management strategy. Factors such as unexpected surges, the impact of product promotions, and product lifecycles are all easily anticipated and impact the inventory kept on hand. Therefore, understanding the elements to analyze when assessing inventory levels can mitigate at least some of the uncertainty inherent within supply chains.   

The CPIM not only equips supply chain professionals with the tools they need for effective inventory management but to also operate in a world that’s far more complicated than the story of Goldilocks. Supply chain professionals exist in a fast-paced, exciting environment defined by global impact but also global challenges. Faced with such opportunity, they need every tool at their disposal, and that’s exactly what the Certification in Planning and Inventory Management provides.

By obtaining the CPIM, supply chain professionals join over 100,000 previous CPIM recipients and rapidly become a valuable and irreplaceable member of their organization. All it takes is a willingness to get started. 

At APICS Milwaukee we’ve been helping supply chain professionals advance in their careers for over 45 years with access to expert instructors and globally recognized certifications. We are the premier professional association for supply chain management, helping over 160 Milwaukee area companies represented by our members, with educational and networking opportunities.   

Let us help you advance your supply chain career in 2020! Globally recognized expert instructor-led CPIM Part 1 in-person or VIRTUAL starts on September 10th! Learn more... 

Better Sales & Operations Planning (S&OP) Helps Manage Global Supply Chain Risk

Have you reviewed your global supply chain plans recently? Many companies even now with so much uncertainty have not revisited their overall supply chain plans. Given global complexities, pandemics and tariff wars, the need for supply chain agility, risk management and contingency planning has never been greater.

Global Trade Magazine recently shared insights from Paul Baris on how S&OP can help companies have a long term process to ask the necessary strategic questions on a regular basis summarized below. Paul is a supply chain expert with over 30 years of experience in the industry as a VP of Supply Chain for several companies as well as a consultant implementing S&OP, Inventory Strategy and Demand Planning practices.

Mr. Baris suggests, “Stepping out of the day-to-day S&OE during the S&OP process allows for that broader perspective to evaluate “what-if” situations that could impact costs, demand, supply and margins before they reach fruition. In this manner, S&OP is a useful scenario-management tool to look at these cost changes, price increases and estimated adjustments to volumes at an aggregate level to quickly identify the potential impacts to the bottom-line without having to perform a time-consuming SKU-by-SKU analysis.

Contemporary S&OP tools often have scenario-modeling capabilities and increase the speed and accuracy of these strategic evaluation exercises. However, depending upon the scale and scope of a company’s supply chain, an expensive tool is not always necessary. Well-designed spreadsheet models populated by databases may be a sufficient starting point for a business. No matter what tool is utilized, the S&OP process is designed to identify potential issues and act as a launching point for projects elsewhere in the organization to identify methods for addressing those issues in the most cost-effective manner.

Companies with well-designed and utilized Sales & Operations Planning processes have well-demonstrated benefits of:

  • Reduced stock-outs, driving higher service level

  • Lower variable labor costs

  • More efficient raw material, work-in-process and finished goods inventory utilization

  • Lower transportation and material acquisition costs due to more stability

  • Higher gross margins

  • Increased top-line sales

Strategically including tariff management and other global supply chain variables in the S&OP process to evaluate possible impacts to the supply and demand balance, as well as cost structure, is critical to ensuring the continuity of supply necessary to provide high levels of service and cost management.”

At APICS Milwaukee, we’d add that S&OP process allows senior management to be more involved with running an operation. Now is the time to review your global supply chain plans to ensure your company is positioned for success moving forward.

Looking for more information on S&OP best practices? Join our next Breakfast Roundtable on August 19th where we’ll be sharing information on S&OP tools. Learn more…

APICS Milwaukee has been helping supply chain professionals advance in their careers for over 45 years with access to expert instructors and globally recognized certifications. We are the premier professional association for supply chain management, helping over 160 Milwaukee area companies represented by our members, with educational and networking opportunities.   

Let us help you advance your supply chain career in 2020! Starting in September, APICS globally recognized supply chain certification instructor-led courses will be available in the Milwaukee area for in-person and virtual for CPIM, CSCP and CLTD.  Learn more…

Join us on August 20th for THE VALUE OF APICS MEMBERSHIP AND EDUCATION: INFORMATIONAL WEBINAR! For additional information, contact us via our website at: http://apicsmilw.org or via email at: [email protected]

Mixed Reality (MR) for Supply Chains

The pandemic has forced many operations to significantly increase workplace safety and leverage technology even more to stay open. Virtual technology allows for less physical interaction and tools such as Immersive Mixed Reality (MR) offer a fully immersive experience that brings virtual objects into the real world or one which blends the physical world with the digital one.

What is Mixed Reality (MR) for Supply Chains?

MR allows industrial designers and logistics operations the ability to conduct real-time 3D visualization and CAD for design. According to a recent article by Supply Chain Management Review, some organizations report minimized errors using MR through instructions overlay, remote assistance, and better planning and visualization. This has resulted in a more than 40 percent increase in productivity in some instances. MR technologies provide significant time savings to the plant build process through an optimized decision process, which positively impacts the entire OODA Loop (Observe, Orient, Decide, Act).

Supply Chain Management Review goes on to state,

“These bottom-line improvements are made possible because of the greater efficiencies MR offers. The technology offers a three-dimensional, computer-generated environment that allows designers and engineers to interact with product builds by a person. That person then becomes a central part of this virtually created world in the form of a hologram, or is “immersed” within the production with the capability to manipulate objects or perform a series of actions in real time.

How Logistics Providers are Overcoming MR Challenges

However, many firms are also finding new challenges in employing newer MR technologies. Enterprise-grade high-quality MR platforms require both performance and scale. Manufacturers that deploy these gain a rich repository of existing complex 3D CAD/CAM models created over time.

As these virtual environments become richer and larger, the repository continues to increase. This cycle is repeated for each of the different MR hardware platforms, making it difficult for any manufacturer or business to move from experiments and pilots to full scale deployable solutions, thus stunting the speed of innovation and effectiveness.

Many organizations are overcoming this great challenge by leveraging new solutions offered through cloud-based (or remote server based) MR platforms powered by distributed cloud architecture and 3D vision-based AI. These MR cloud platforms provide the desired performance and scalability to drive innovation in the industry at speed and scale.

Industrial enterprises, manufacturers and supply chain outfits today are experiencing the next wave of technology innovation that will fundamentally alter the way they operate. This transformation is primarily driven by merging of the digital and physical world to create a better, smarter and more efficient way of operating. Immersive technologies such as Virtual Reality (VR), Augmented Reality (AR) and Mixed Reality (MR) technologies are playing a pivotal role in this transformation.”

We will likely see many supply chain managers turning to creative technology solutions such as MR as we continue to emerge from the impacts of COVID-19.

At APICS Milwaukee we’ve been helping supply chain professionals advance in their careers for over 45 years with access to expert instructors and globally recognized certifications. We are the premier professional association for supply chain management, helping over 160 Milwaukee area companies represented by our members, with educational and networking opportunities.   

Let us help you advance your supply chain career in 2020! Starting in September, APICS globally recognized supply chain certification instructor-led courses will be available in the Milwaukee area for in-person and virtual for CPIM, CSCP and CLTD. Learn more…

Join us on August 20th for THE VALUE OF APICS MEMBERSHIP AND EDUCATION: INFORMATIONAL WEBINAR! For additional information, contact us via our website at: http://apicsmilw.org or via email at: [email protected]

Tips to Help Manufacturers Embrace Remote Workers

Has your company shifted to remote work for all employees whose job functions do not require them to be physically present? Certainly, the pandemic has changed the location of work for many employees, including in the traditional in-person world of manufacturing. Also, per a recent Gartner poll showed that 48% of employees will likely work remotely at least part of the time after COVID-19 versus 30% before the pandemic.

Manufacturers have had to adjust to remote work quickly. Unifize recently shared several tactics summarized below on how manufacturers can, in fact, embrace remote work and mitigate some of the risks of COVID-19 to their business and employees’ welfare.

If people can work-from-home, they should! In most manufacturing companies, non-production staff is anywhere between 25% and 50% of total headcount, meaning that manufacturers can instantly enable remote work for these employees. This is not only safer for those employees who are working from home but also safer for those that need to remain at the production facility. Therefore, if you are in a leadership position, you must first acknowledge this and work through the remaining steps to implement change.

Work on changing perceptions. Enabling remote work for office employees is likely to require a change in attitude across the organization. The following is a list of objections that you may encounter while trying to making this shift, along with some recommendations on how to respond to them:

  • We are naturally more technophobic than people in other industries: Find and evaluate cloud-based digital tools that are easy to implement and use by all employees.

  • We believe that engineering problems are best solved on the shop floor: Photo and video technology can be leveraged to resolve the vast majority of these problems.

  • We prefer that our teams sit closely together and that people just ‘walk over’ to each other to get help and collaborate: The internet has enabled high-speed, real time communication and collaboration that has mitigated this need, along with delivering a host of other benefits including better traceability.

  • We mistrust cloud-based technology for security reasons: In practice, your data is likely to be far more secure when it is hosted on the cloud. Today, more than 66% of manufacturers now use cloud technology.

  • We prevent our employees from accessing communication tools on their shop floor: You need to think hard about the trade-off between enabling better collaboration and policing your employees.

Use digital tools to enable remote work: There are a large number of tools available for you to use. It’s important that you evaluate these thoroughly and get buy-in from your team. The following is a list to get you started:

  • Video Conferencing: Zoom, Google Hangouts, Webex, Skype and MS Teams

  • Project management: Microsoft Project: Full-featured and extensive but difficult to use; Asana:  Enables hierarchies of tasks but isn’t built for manufacturers; Trello:  Great lightweight tool for kanban and basic projects; Airtable:  Good for advanced linking of complex databases

  • Real-time chat: Whatsapp/iMessage: Free and ubiquitous; Slack:  Made for developers and great for small teams; Microsoft Teams:  Free for up to 200 users and integrates well with Office

  • Cloud-based office tools: Google Docs: Easy to use and free if you also use Gmail; Office 365:  Full-featured and more suited to the enterprise

As Gartner’s survey predicts, remote work will likely remain a part of the model for even many manufacturers post-pandemic. Coming up with a plan to allow remote work in the long term and even embrace it will be important for manufacturers to remain competitive and grow.

At APICS Milwaukee we’ve been helping supply chain professionals advance in their careers for over 45 years with access to expert instructors and globally recognized certifications. We are the premier professional association for supply chain management, helping over 160 Milwaukee area companies represented by our members, with educational and networking opportunities.   

Let us help you advance your supply chain career in 2020! Starting in September, APICS globally recognized supply chain certification instructor-led courses will be available in the Milwaukee area for in-person and virtual for CPIM, CSCP and CLTD. Learn more…

Join us on August 20th for THE VALUE OF APICS MEMBERSHIP AND EDUCATION: INFORMATIONAL WEBINAR! For additional information, contact us via our website at: http://apicsmilw.org or via email at: [email protected]

Value of APICS Supply Chain Certifications

Have you considered investing in an APICS supply chain certification?

The Association for Supply Chain Management (ASCM) recently published their supply chain salary survey and reported that 91% of supply chain professional reported earning a salary increase in 2019. In addition, supply chain professionals who had earned at least one APICS certification reported median salaries that were 21% higher than those who were not certified per the graphic below.

TalkingLogistics recently shared their survey and had asked their members if getting a supply chain certification was important for career advancement, especially for new supply chain professionals. They also asked which certification they would recommend. A majority (61%) of their member respondents said that getting a supply chain or logistics certification is “Important” or “Very Important” for career advancement, especially for new professionals. Less than 20% said that it was “Slightly Important” or “Not Important.”

They went on to state, “An overwhelming majority of the respondents (81%) recommend APICS Certified Supply Chain Professional (CSCP) certification, with APICS Certified in Production and Inventory Management (CPIM) ranking second with 39% of the respondents recommending it.”

Their graphic below shows how APICS certifications rated versus other supply chain certifications.

Lastly, TalkingLogistics shared, that overall respondents were generally positive about the value of certifications, especially for professionals who are new to the discipline or didn’t study supply chain management in college. Here’s one example:

“I have received the following certifications from APICS (ASCM): CSCP, CLTD, CPIM, and SCOR-P Endorsement. I feel that achieving certification, especially after being removed from school for a period of time, reflects your willingness to advance yourself. CSCP is a good one to go after because it addresses the supply chain end-to-end, while CPIM and CLTD focus on the front end and back end, respectively. SCOR-P enables you to learn how to analyze your company’s processes and benchmark them against [similar] companies. [Obtaining certifications] is keeping yourself relevant and up to date.”

At APICS Milwaukee we’ve been helping supply chain professionals advance in their careers for over 45 years with access to expert instructors and globally recognized certifications. We are the premier professional association for supply chain management, helping over 160 Milwaukee area companies represented by our members, with educational and networking opportunities.   

Let us help you advance your supply chain career in 2020! Starting in September, APICS globally recognized supply chain certification instructor-led courses will be available in the Milwaukee area for in-person and virtual for CPIM, CSCP and CLTD. Learn more…

Join us on August 20th for THE VALUE OF APICS MEMBERSHIP AND EDUCATION: INFORMATIONAL WEBINAR! For additional information, contact us via our website at: http://apicsmilw.org or via email at: [email protected]