Measuring cost savings in the operating room: a matter of FOCUS (follow-through, obsolescence, control, utilization, standardization)

In summary, changes came slowly at first in the OR. The biggest inventory reduction came about a year after the effort had begun. It would seem that tackling obsolescence, standardizing products, etc. would give an initial "big chunk" savings, with small amounts coming later as inventories are lowered. What we expected did not occur, due to the inherent nature of practices and what was customarily being used. For example, previously, some equipment purchases were paid for by purchasing product, which resulted in long-term commitments and high supply costs. The OR at times seemed more like a process of managing change, not just supplies. FOCUS is a daily process. How many times can you afford to overlook this process? How often are the mistakes of the past repeated? In review, we suggest this simple outline: Follow-through (review each case from start to finish), Obsolescence (schedule inventories every six months), Control (achieve inventory management by adjusting PAR levels to needs), Utilization (utilize product/equipment with your control), and Standardization (standardize products and measure results).     

Applying management science in developing countries: ABC analysis to plan public drug procurement.

Despite the vital role of pharmaceuticals in the prevention and treatment of major causes of death and disability in the developing world, high costs and frequent shortages remain chronic problems for drug supply programs. Yet, management techniques developed to optimize the use of scarce resources have had limited application in the settings of greatest need. An important determinant of the cost and supply of drugs is the procurement pattern. This study reviews procurement patterns in selected public supply programs and, using management science techniques, compares alternative procurement patterns in terms of inventory costs and shortages. Using drug cost and quantity estimates from two countries, a simulated ABC analysis was performed. This analysis showed drug inventories to be typical of industrial inventories: Over 80% of the consumption in dollars was accounted for by less than 20% of the drugs. Procurement patterns with more frequent purchasing or delivery of high usage drugs could reduce average inventories 20-50% over the commonly observed annual purchasing pattern. Sensitivity analysis of the results confirmed that variability in the delivery time and consumption pattern has a significant impact on the efficiency and economy of a procurement system. Closer supplier monitoring and better forecasting should reduce this variability.     

Inventory management for cardiac catheterization labs: the Princeton-Baptist Medical Center experience

Several issues must be considered for implementation in order to decrease inventories and make them more manageable. Physician consensus on products, strict vendor control by the department manager, setting and maintaining low par levels, inventorying stock daily, negotiating just-in-time deliveries, conservation-minded staff, and working in concert with central supply and materiel management personnel are steps that when employed correctly can lead to more manageable inventories in cardiac catheterization departments. If these steps are implemented, they will enhance the liquidity of the department and ultimately that of the medical center.     

The receiving simplification partnership: a win-win approach to better service and higher profitability.

To achieve competitive advantage, customers and suppliers are increasingly forming logistics partnerships to improve supply chain performance and reduce costs. The partnerships are typically motivated by the need to solve a particular problem, but with attention and open communication, new program ideas can develop, sometimes even breakthrough concepts. During the course of their partnership, Avery Dennison and United Stationers created a program that dramatically simplifies and speeds receiving and put-away of shipments with the aim of reducing workloads, improving service, and increasing profitability. The program involves optimizing order quantity increments to full-pallet, layer, and case volumes based on demand and warehouse configurations. Within six weeks, the results included a 50 percent reduction in shipment line items and 92 percent fewer put-away pieces, despite unchanged inventory levels.     

物流管理在企业中的作用

本文介绍了物流管理的重要性,物流管理采用的方法、技术。采用ERP总体方案进行规划管理,物资供应系统实施策略与步骤,库存管理、采购管理、高级供应链实施内容和效果。     

Improving health care means spending more time with patients and less time with inventory

In most hospitals and medical establishments, about 35 percent of their budgets are spent on supplies and labor to manage the inventories, material, and information flows; typically, these are managed as multiechelon systems. The importance of reducing inventory costs, among others, has become relevant in today's health care management. This research applies just-in-time concepts to health care inventories.     

The effect of transaction costs, payment terms and power on the level of raw materials inventories

This paper proposes and tests an explanation for the level of raw materials inventories based on transaction cost economics theory and the role of power in a supply chain. According to this explanation, raw materials inventories are larger the higher a company's transaction costs and the lower its storage-related production and management costs. Factors that affect these costs are the company's vulnerability to opportunism, whether the input becomes more or less costly to store and manage as it moves through the supply chain, payment terms and the company's power in relation to its supplier. This explanation for the level of raw materials inventories was tested on a large sample of customer industries matched to their main supplier industries. Consistent with this theory, the empirical results show that companies hold larger raw materials inventories the more money their suppliers spend on research and development and the less important the customers are to their suppliers. These results are important because they indicate companies must consider a wider range of factors than previously thought necessary when establishing inventory policy.     

Mission impossible? The boss wants to double our inventory turns.

Despite the prolific implementation of manufacturing systems, JIT principles, Kaizen events, and cycle time reduction programs over the past few years, high inventories still plague many companies. The assumption that implementing these principles and techniques will automatically result in inventory levels that satisfy management frequently proves to be false. Events like mergers, introduction of new competition, and a dropoff in business often trigger edicts to cut inventories. The cost of inventories also extends beyond the traditional accounting measurements to include hidden operating costs that everyone should want to eliminate. This article looks at the reasons for inventories and explores strategies for reducing them.     

Estimating and auditing aggregate inventory levels at multiple stocking points

Relatively little attention has been given to methods for estimating and auditing distribution network inventories in the aggregate. This article shows that a simple polynomial equation whose coefficients can be determined by means of regression analysis techniques is a good, basic tool for estimating overall inventory levels and can be used to provide insight into the effectiveness of inventory control policies at different stocking points. It also serves as the basis for auditing and controlling current inventory policies on an ongoing basis. Tests of the model in a number of actual cases revealed a predictable association between the inventory policy being used and the coefficient values in the polynomial equation.     

供应链环境下CPFR库存管理技术及其实施研究

CPFR是一种协同式的供应链库存管理技术,对供应链伙伴改善合作关系、减少库存、提高预测准确度和供应链效率等均有重要的意义。从研究CPFR的产生过程出发,阐述了CPFR的基本理念,然后介绍了CPFR的实施模型及其运作过程,最后分析了企业实施CPFR的基础条件,并阐述了CPFR的具体实施步骤。     

Production and supply management strategies in Nordic paper mills

The traditional production management strategy in paper manufacturing is based on a volume-intensive approach. This involves the measurement of overall performance or productivity, while aiming at a high level of capacity utilisation and minimum waste levels. This approach has proved successful in mills producing high volumes with a limited and standardised product range. The situation changes radically when paper and board products are being tailored to customer-specified dimensions and quantities. The volume-based approach is no longer appropriate, and production has to be controlled by an approach that considers inventory performance along the full length of the supply chains. This paper presents five empirical examples to illustrate the use of the two strategies. The detailed analyses of production cycles, the logistical solutions applied and the inventory levels at various stages of the supply chain, show that the Nordic paper industry is slow, with average lead times of 79 days to market. When production cycles are reduced and logistical alternatives are fully exploited, it can be seen that 30% of the inventories can be regarded as slack. The summary of the cases shows that speedier operations easily generate direct cost savings amounting to 2–5% of annual turnover. All these results can be achieved without additional investment; all that is required is a change in production planning principles and logistical control procedures. The paper concludes with a challenge to the Nordic paper industry to be the first in its field to achieve the higher level of productivity that faster operations can generate.     

Trying to imagineer the future? ... Don't just "imagine" inventory integrity!

Inventory integrity has been discussed, debated, and argued many times, in many organizations. The attempts at a solution have been numerous, from corrective action teams and inventory accuracy committees, to subtask groups and mandates. For a number of reasons, however, the required 95 percent integrity is seldom achieved, and never permanently. This article presents a proven, tested methodology to increase inventory integrity to 95 percent and to keep it there, in a nine-step process that takes no more than 120 days to implement.     

Economic impact of enhanced forest inventory information and merchandizing yards in the forest product industry supply chain

Forest products industry should maximize the value of timber harvested and associated products in order to be competitive in global markets. Enhanced forest inventories and merchandizing yards can help in maximizing value recovery in the forest products supply chain. This study develops an optimization model to analyze the economic impact of enhanced forest inventory information and merchandizing yard operations in the forest products supply chain. The application of the model is demonstrated by using a case study of a hypothetical forest industry in northwestern Ontario, which obtains four log assortment grades from the surrounding eight forest management units. The model analyzes five different scenarios with 0%, 25%, 50%, 75%, and 100% certainty of tree quality in forest inventory information. The results of the study show that with full certainty of tree quality information, it is possible to gain 49% in gross profit in comparison with a scenario with no certainty. The usefulness of enhanced forest inventory and merchandizing yard in the entire supply chain of forest products industry is recognized by maximizing total value of wood fiber (by allocating right log to the right product), reducing fluctuations in raw wood fiber supply, and minimizing inventory carrying costs and lost sales.     

Random shocks in experimental spot and forward auction markets

Traders face random demand and supply schedules in two experimental auction environments. One is the standard double auction and the other requires sellers to produce and hold inventory before trading. Inventories cannot be held between trading cycles. The endogenous and random cost of inventory disciplines sellers to restrict sales and keep prices relatively high. Anxious buyers may bid up price because total sales cannot exceed inventories. Shocks to the system do not change this behavior except when seller production costs are random. In this treatment, prices converge to the predicted competitive equilibrium. The inventory requirement in all cases increases the earnings of sellers relative to buyers.     

供应链环境下基于服务水平约束的联合库存模型

联合库存(JMI)是供应链库存管理研究的一个热点,近年来引起了不少学者的注意。联合生产库存模型是研究联合库存策略的主要模型之一。考虑一个典型的单一产品的二级供应链系统:单供货商(卖方)-单销售商(买方),假定企业不允许缺货以及外部对买方的需求量是一个服从正态分布的随机变量,建立了基于服务水平约束的联合生产库存模型;利用文献[6]中的数值例子验证了模型的有效性,文章同时也为联合库存策略的实施提供了一种简单易于控制的思路和方法。     

大型养路机械物资零库存管理应用与研究

维修保养大型养路机械设备所需材料配件种类多,数量不确定,在实施零库存管理中面临着难题。文中从零库存理论着眼,分析了大型养路机械物资零库存管理的基础方法,研究如何应用ERP系统提升零库存管理,以及避免主要风险,旨在探索建立大型养路机械维修用物资的零库存供应保障体系。     

论主动存储

提出了主动存储的概念，分析了主动存储的优越性以及传统存储企业融入供应链系统的重要性，指出信息实时收集和处理技术，计算机网络技术和系统控制技术是传统存储企业实施主动存储的必要条件。     

Productivity measurement for a distribution firm

The paper derives a consistent accounting framework for the treatment of inventories when measuring the productivity of a distribution firm. The average purchase price of an inventory item during an accounting period must be distinguished from its average selling price and these two average prices should be distinguished from the corresponding balance sheet prices. The accounting framework is implemented for a distribution firm which sold 76,000 separate items. The firm achieved a 9.6 percent per quarter total factor productivity growth rate over 6 quarters.The first author is a Professor of Economics at the University of British Columbia and a research associate of the NBER. He thanks the SSHRC of Canada for research support. The second author is a recent graduate of the University of British Columbia.     

The impact of inventory dynamics on long-term stock returns – An empirical investigation of U.S. manufacturing companies

This paper investigates the relationship between the inventory dynamics and long-term stock returns of a large panel of U.S. manufacturing firms over the time period from 1991 to 2010. We propose two measures of inventory dynamics: one metric to assess the fluctuations of quarterly inventories within the year and a second metric to quantify relative year-over-year inventory growth. Our results indicate that within-year inventory volatility (IV) and abnormal year-over-year inventory growth (ABI) are associated with abnormal stock returns. Both metrics cannot be entirely explained by common risk factors. We find that firms with high IV and low ABI have the best long-term stock returns, and that stock performance decreases monotonically with higher ABI values. Our results are robust to various control variables including size, book-to-market value, industry and prior performance. We therefore conclude that changes in inventory levels provide valuable insights into the risks and opportunities faced by a company.     

A new focus on inventory performance and bottom-line profits

This article is about a new way to measure inventory performance and about putting a dollar focus on inventory management priorities. It reviews the financial impact of inventories and shows how the information from any materiel requirements planning (MRP), MRP II, ERP, DRP, or orderpoint system can be used for setting individual objectives for inventory reduction, measuring performance by inventory segment, and monitoring continuous improvement. It will also consider the merits of paying performance bonuses to materiel planners and review some inventory reduction results.