Material Presentation Options in the Work Area – Keep Fill


In a recent blog posting I spoke briefly about having the RIGHT material presentation tools in the work area for your employees.  Today, I’d like to expand on that idea as well as begin a multi-blog series on the most common of these tools used in our industry.

Why use material presentation devices in the work area?  This is a common question and the answer is very simply, efficiency.  Be it a skilled tradesman, a mechanic, or a grounds keeper, their role in your organization is to repair or maintain things, and/or to perform some other function that is critical to your daily objective.  Ideally, you would like them completing those objectives as quickly as possible and correctly the first time.  What you really do not want to see, is time spent by these key individuals doing the non-value added tasks to get to their key objectives.  In support of that ideal, keeping the time used to chase a repair part, a planned replacement, or even office supplies is desired.  One way to acclomplish this task while still minimizing risk of inventory loss (as much as possible) is to use very well thought out, organized, and properly maintained work site presentation devices or POU (Point-Of-Use) devices for purposes of our discussion.

The first POU device I’d like to discuss is POU in it’s simplest form, the “Keep Fill” POU.  As pictured with this blog posting, the Keep Fill POU is simply a series of bins (or shelves, or even boxes if desired).  Each of these bins has an individual item in it based on what’s used in the general work area where you are placing the POU device.  There is only one bin of each item typically, and that bin holds an acceptable quantity (based on usage and cost).  The bins are well labeled and typically barcoded to allow ease of refilling them on a set frequency.

What do we put in the Keep Fill bins and how much?  These are great questions and each could have a slightly different answer depending on the POU philosophy that your organization adopts.  Typically, ValuePoint only recommends inexpensive, non-critical, or very high usage items for this type of POU.  This balance ensures you gain the maximum amount of efficiency (by not having your team members running to the storeroom or chasing orders all over) while minimizing the risk of financial loss by individuals who misuse or abuse the opportunity for efficiency (yes it will happen to you).  Placing only high usage items in the POU ensures you minimize “walk time” and gain maximum efficiency for the inventory risk.  Placing inexpensive items also ensures that you minimize that same financial risk, while placing non-critical items ensures you don’t have excess wasted time if the bin runs empty before you refill it on the next planned cycle.  Your organization may choose one or more of these types of material as part of your overall Keep Fill POU philosophy.  That decision depends greatly on the walk time to your local goods storage area, criticality of the work being done, and organizational financial decisions surrounding inventory and transactional cost.

One last critical idea to any POU is MAINTENANCE!  At some frequency, a team member is going to be needed to fill and maintain the overall POU.  It is critical during the setup phase that you carefully plan that process to also ensure maximum efficiency.  Ideally you also DO NOT want the team members who use the material to be the ones who fill the POU areas.  Doing so really defeats the purpose of efficiency in the first place.  Barcoded bins that support the use of scanning are an easy way to speed the refill process by automating the identification of what material is needed, the qty the bin holds, and dispersing the used material (if needed) from an inventory account to a pre-determined expense account as an example.  The POU will also require cleaning and other organizational maintenance with some regularity based on the environment, team member discipline to the process, and change management.

In the end, the mistake made by too many organizations is to underestimate what it takes to setup POU areas and PROPERLY maintain them.  What we typically see stepping into a new client location are POU areas that are overrun with material that doesn’t belong, bins that are not filled, or POU devices that look and operate beautifully but have all the wrong stuff!  As a result they get walked by daily so team members can waste time going all the way to the storeroom to get what they really need and what should have been in POU.  The bottom line is doing it wrong can cost you more than not doing it at all!

Take the time to call the experts.  Let’s discuss how a ValuePoint managed inventory program can bring your organization a return on the investment both from a spend and operational availability viewpoint today.  Not making money SELLING you the material means we can make decisions based on what’s best for YOU.

ValuePoint Achieves World Class Inventory Accuracy!


For the fourth year in a row, ValuePoint has again achieved the highest level of world class inventory accuracy on behalf of it’s client at one of the 30,000 sq.ft. offsite indirect warehouse’s we operate for them.  Filled with some 13,582 individual part numbers at a value of $15.2 million dollars, the quick and accurate operation of this facility is critical to support a very tight just in time manufacturing environment.

With everything from janitorial supplies to critical machine spare parts in stock, a full physical inventory of every part number is conducted annually.  Jointly completed recently for 2016, it was found that only 55 part numbers had ANY type of inventory count discrepancy.  This level of performance equates to a part number accuracy rate of 99.6%!  Updating system counts on the 55 part numbers which did contain minimal errors, required correcting inventory transactions that had a NET financial impact of just $552.65.  With over $15.2M in inventory, the client can rest easy that their valuable inventory is controlled and properly managed at a very high level by the ValuePoint team.  In fact, it’s the same team in this instance that has achieved this level of inventory accuracy during each year’s annual physical for 4 years in a row.

Led and executed daily by a team that is committed to excellence, they put our processes, systems, and accountability to work daily to achieve this type of success.  While not easy, for those customers that allow us to put this approach to work for them, this level of performance is absolutely achievable and directly results in an improved bottom line.

We are extremely proud of this team as well as the entire ValuePoint family for all they do on behalf of our client’s.

Data – Your MOST Valuable Indirect Asset


While you may feel like the machine spare parts, janitorial supplies, or chemicals you buy and stock are your most important MRO assets, the reality is they come second to your indirect material data!

Common even in 2016, many very large manufacturing organizations still utilize excel spreadsheets and frankly even note pads to manage their indirect storerooms and purchasing processes.  Even those that made the transition to the use of ERP systems in many cases continue to under-apply or even miss-apply those systems to the abnormal world of indirect material.

The reality is that your ability to accurately and effectively procure indirect material as well as properly manage it, disburse it, and continually improve your approach to it depends on the data your collecting and its accuracy.  Consider a couple scenarios and how they may apply to the organization you serve today:

  1.  Do you collect data using an ERP system however the quality of that data is very low making it almost useless?  As an example manufacturer part numbers are buried in descriptions instead of having their own database field where they are easily searched, categorized, and analyzed.  Do your maintenance teams as a result find it easier to visually “shop” your storeroom instead of searching the system for exactly what they need in seconds?
  2. How about manufacturer names?  Is a particular brand entered into the system multiple ways depending on who entered it?  As an example consider the fake company I’ll call Widget, LLC, makers of the famed widget.  Within any given data set we see, Associates allowed to enter data in an ERP system may have identified them as Widget LLC, Widget, Widget, Inc, or even miss-spelled their name as Widgit.  Unless you can identify these all as the same brand, your means to pull data and negotiate with Widget, LLC directly or with their distributor base is severely hampered.  Searching your system for a part made by Widget, llc might just mean you don’t believe you have it on hand when you really do.  In fact, you may have a lot of them and they have not been used in years because they are not found when you search the system.
  3. Still using that Excel spreadsheet to manage your storeroom?  Do you encounter Team Members who forget to leave a ticket or note indicating what they took from the crib and where they used it?  Unfortunately, unless you cycle count your whole storeroom every single day manually this means your inventory isn’t accurate and downtime will occur.  It also guarantees a lot of hours will regularly be expended chasing and expediting parts to get it back up and running.
  4. Do you know WHO is using your indirect material and where?  Do you keep track down to a name and a machine, cell, or area number?  If not, then your ability to hold people accountable to your indirect material spend is minimal at best.  And your ability to identify manufacturing issues driving up your indirect material spend is a guessing game.

While just a few simple examples, these basics can make a big difference in your indirect spend and an even bigger difference in your up-time and resource availability.  It doesn’t matter if you’re manufacturing clocks, trying to manage a public transit fleet, or supporting a group of community schools.  Not knowing what you have, where it is, and how it’s being used means you’re wasting money.

If you feel you do not have the funding to hire someone to help fix these issues, consider using a fraction of what you’re currently spending not to.