World Coal’s March magazine was published this week, with an article from Stockpile Reports that states the case for more frequent physical inventory counts as the best way to control inventory swings.
Companies in the mining, construction, and aggregate industries strive to achieve and maintain an inventory +/-5%. However, the actual variation might realistically skew over/under in the range of 20 – 30% vs actual. For national or global companies with multiple sites and locations, any variation could easily multiply into the tens or hundreds of millions of dollars.
Unlike retailers and manufacturing companies, which perform physical inventory counts once or twice a year, materials companies must perform more frequent counts to reduce errors that build up over time. Historically, companies have performed annual inventory counts with quarterly or monthly estimates to help manage write-off risk. Some companies have now advanced to twice-yearly, or even quarterly counts.
The article has a brief overview of technological advances in photogrammetry, Software as a Service (Saas), and drones.
A case study includes information about a multinational materials company that manufactures and distributes cement, ready-mix concrete, aggregates and materials including coal, recently approached Stockpile Reports searching for a solution to reduce time and costs associated with inventory measurements across multiple sites.
Note: This article first appeared in the printed March issue of World Coal.