February 4, 2013

If you’re like a lot of businesses today, somewhere on the grounds or inside the facility is a room jam packed with maintenance and repair parts.  You probably don’t have any idea what’s in the room since you have no process in place to manage the inventory. Meanwhile, the inventory seems to be growing, and if […]

In this economy, businesses are looking for new ways to improve efficiencies and save money over the long haul.  For many businesses, inventory management (particularly spare parts inventory) is one of the last bastions of opportunity. Dan Floen, President, Professional Materials Management (PM2) www.pm2online.com In these tough economic times, the pressure on businesses has never been

 This week’s blog will continue our discussion of determining total cost of inventory management. Previously we identified three key cost factors to measure prior to the launch of any significant Inventory management strategy. To refresh your memory, they are: Inventory Cost Process Cost Procurement Cost This week we will look more closely at procurement costs.

Measuring Inventory Cost – Last week, I laid out the three key cost factors that should be included to accurately measure your total cost of inventory management baseline. The first key facter, which I’ll talk about today, is inventory cost.

Process Cost – Last week we explored factors to consider when measuring inventory costs, so this week we will look more closely at factors affecting the measurement of inventory process costs.