Inventory Management, Purchasing

          Bankruptcy forced the DeLorean Motor Company (DMC) to shut down its Belfast, Northern Ireland production facility in 1982, with an inventory of over 1,700 brand new cars and millions of parts. During liquidation, Consolidated International acquired all of DMC’s remaining inventory. Meanwhile, Steven Wynne, a British mechanic specializing in DeLorean maintenance and restoration since 1982, opened a 40,000 square foot warehouse in Houston, Texas, meant to act as a centralized distribution centre for used DMC parts. In 1997, Wynne acquired all DMC inventory from Consolidated International, in addition to the DeLorean Motor Company name and logo.

          Initially, the acquisition was aimed to support Wayne’s maintenance, restoration and parts sales operations. He and his team have serviced a consistent stock of 35-45 DeLoreans belonging to owners from all around the world since 1987. They also sell parts to DeLorean owners and restorers. As those operations were still not considerably cutting into the new DMC’s parts stock, they began assembling brand new DeLoreans themselves.


         A DeLorean requires roughly 2,700 individual parts of which DMC has over 99%, with no opportunities for traditional inventory replenishment. To fill the holes in their inventory, the remaining less than 1% are rather easily reproduced, rebuilt or procured as used parts. As all original DMC technical specifications and drawings were also acquired, they are often able to reproduce parts using the original specs with CAD/CAM and 3D modeling. This, in combination with their current inventory, allows the modern DeLorean Motor Company to produce a maximum of 500 cars, while continuing its additional pursuit to be the most prominent facility for DeLorean service, parts and restoration.


     

        Since 2016, the new DMC has employed Acctivate as its inventory management software. Acctivate is utilized for inventory adjustments when parts are received in the distribution centre, whether reproduced or acquired as used parts. Those adjustments are then automatically integrated into DMC’s web store. Acctivate supports and is used to create assemblies (one part containing multiple parts) in addition to sales order management including open and closed sales order monitoring, the creation of pick tickets and sales order printing. Some service orders, such as full frame-off restorations, require 200-300 line items for labor codes and part codes.

We’re able to build a service order pretty quickly with Acctivate, especially with some of these big restorations– Sarah Heasty, Service Manager, DeLorean Motor Company.

         DMC uses Acctivate’s Business Activity Service Billing module to create service order quotes, where separate subtotals can be created for a customer’s engine, transmission, suspension, etc., providing increased transparency. The Business Activity Scheduling module is employed to track labour hours and parts used for each service order. Labour hour tracking helps with DMC’s capacity planning as parts are pulled prior to service, increasing efficiency.

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Inventory Management, Logistics, Supply Chain Management
Barcodes and their associated scanning guns have been a staple in inventory management. Whether implemented in a library for signing books in and out, or within a large-scale online retailer’s distribution centre (DC), the use of both wired and wireless barcode systems is widespread throughout the supply chain. Tech companies including the Vitech Business Group are currently shaking up the inventory management industry through their integration of voice-directed order picking. Their product allows for order pickers to receive picking lists audibly, then confirm the pick by reading the product name or code out loud , rather than scan it with a traditional barcode scanning gun. The technology, originally developed by Honeywell as Vocollect Voice Total Solutions, has been around for quite some time. Vitech has integrated it into the SAP Extended Warehouse Management (SAP EWM), a component of the SAP’s supply chain management suite of solutions. The recent adoption of Vocollect Voice Total Solutions by Patterson Companies Inc.: a distributer of dental and animal health technology, products and equipment, will be used to demonstrate the effects of voice-directed order picking on the supply chain. This article will provide the reader with an understanding of the subsequent advantages in addition to some risks that may arise in inventory management.




Benefits


Increased picking speed and efficiency

With voice-directed order selection at Patterson, order fillers operate 25% faster than with the traditional barcode scanning system. In fact, pickers were even faster on their initial attempts with the new system than they were on the legacy barcode system to which they were accustomed.

Paperless


Vocollect displays the pick list audibly at the push of a button, with the ability to repeat the audiable list. This alleviates the need for printed picking lists. A reduction of paperwork generally contributes to greater efficiency.

Less Mechanical Error


Damaged barcodes tags lead to errors in the scanning process causing order pickers to input the code manually. This not only causes a delay, it also can lead to input errors. A literate order picker will possess the ability to discern what a marked-up tag represents, where a barcode scanner cannot.

Reduction of training time


Patterson claimed a greater ease and speed for training using the hands-free voice system compared to training employees on a traditional barcode scanning system. This is especially beneficial for temporary order picker hires during the holiday season.

Employee Preference


Paul Courchene, Logistics Core Team Leader at Patterson claims that “No one wants to use the radio frequency (RF) guns…They all want to go hands-free and use voice”. The BBC’s Amazon The Truth Behind the Click Panorama documentary highlights how the constant countdown beeping coming from scanner guns leads to emotional distress, nightmares and has provided evidence of increased risk of mental illness.
 

Employee Pride


Hands-free voice systems are found to produce greater employee cognitive engagement in a repetitive task, leading to increased employee job satisfaction. There is also an institutional benefit derived from the pride associated with the feeling of doing things differently than other organizations.

Risks

Human Error


While Vitech boasts of superb accuracy, voice-directed picking requires validation by the order picker at the pick and at the put in, therefor requiring a second visual confirmation of their voice confirmation. The risks of human error are clearly a possibility within this process. It is up to the inventory analyst to determine whether the increased efficiencies derived from voice-directed picking outweigh the risks of human error.

Barcode Still Required


It should be noted that the implementation of a voice-directed order selection solution will not completely do-away with barcode scanners. As was the case in the Patterson case study, barcode scanning continued to be utilized for receiving and put away functions.

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Inventory Management, Supply Chain Management

In pursuing my Post-Graduate Certificate in Supply Chain Management – Global Logistics, I could not help to draw parallels between the components of SCM and my previous career in mass-participant sports event operations. This indirect background in Supply Chain greatly facilitated the program as I had a constant supply of past professional examples to which I could relate many concepts. The biggest take-away was that all three segments of Supply Chain Management, which include: purchasing, inventory management and logistics are required for a well-managed event, whether on a large or small scale. This article focusses on how mass participant event operations relates to the supply chain management component of inventory management and is the third in a series of three articles on the topic. The first on purchasing can be found here and the second on logistics can be accessed here.

 

Warehousing

 

In event operations, both Just-In-Time (JIT) and traditional warehouse inventory (AKA Just-In-Case) is employed. Re-usable equipment and other objects are stockpiled in storage locations that can include a warehouse, shipping container, trailer or within the event’s office space. Trailers and shipping containers are particularly handy as they are both modular and mobile. One or all containers can be sent to the event venue or moved to an alternate lot and as they are already packed, there is no need to transfer the equipment from storage to a transportation device. Trailers are especially useful for events that tour multiple locations throughout the season and can incorporate highway with rail transportation in the form for intermodal piggybacking. Operations managers will want to perform the light integrity test to ensure the container’s contents will be safe from the elements. However, trailers and shipping containers are not perfect: items stored inside are difficult to access and their outdoor placement puts them at risk of theft, overheating and freezing.












On-demand warehousing is often an attractive option for events who desire the reliability of traditional warehousing, with the scalability of an on-demand service. Storing items inside a traditional warehouse allows for greater access to items that are required by event staff on a moderate basis, regular to intermittent item picking and offers protection from the elements. On-demand warehouse space also allows for organizations to take advantage of potential economies of scale offered in the form of lot size discounts and transportation discounts. Here an event can spread out the procurement of a lot size of items across multiple events, acquiring time and cost savings. Warehouses are an ideal storage location for safety stock.




Just-In-Time

 

For items that are required for the specific event, it often makes no sense to have them delivered to your warehouse, just to have them loaded up and transported to the event venue at a later date. As many medium to large scale events have access to their venue in the days or week leading up to the event, inventory holding savings, transportation savings and time savings can be achieved by having those items shipped directly to venue. This works particularly well for high volume items that you will receive in the days leading up to the event, including food, water, new signing, sponsor banners and other last minute items. The Just-In-Time benefit of eliminating inventory carrying costs is countered by the high risk of stock-out (in this case, not receiving your items on time), due to unexpectedly long delivery lead times. JIT should therefor only be employed with trusted suppliers, with reliable carriers, and for items that make sense to only arrive in the days before.

 

 

A combination storage location types

 

On-demand warehouse space can be useful in alleviating the downsides of trailer and shipping container storage, yet warehousing overhead costs need to be taken into account. It is not uncommon for large scale events to diversify their inventory across office space, warehouse space and trailer/ shipping containers. This was you can take advantage of the mobility of shipping containers and trailers while taking advantage of the convenience of in-office storage locations for items that require regular access. In addition, items that require temperature control and moderate access, whether in the form of intermittent picking or otherwise will benefit from in-demand warehousing.

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