Are Your Inventory Numbers Tracking to Your 2016 Plan?

How are your inventory numbers tracking to your 2016 plan? Q1 is almost over. Are you feeling confident?

Maybe you are assuming that this year will be “different”, and inventory numbers will come close to reconciling, without making changes in current stockpile measurement methods.

Stockpile inventory management is often a real source of ongoing frustration for the companies that have approached Stockpile Reports for help. We met with, and spoke with dozens of people about their challenges at the recent AGG1 conference in Nashville, Tennessee. They outlined many reasons for infrequent measurements.

CEO David Boardman discusses inventory challenges with booth visitors at 2016 AGG1 conference.
CEO David Boardman discusses inventory challenges with booth visitors at 2016 AGG1 conference.

Accessibility, safety, costs, schedules and competing priorities make it difficult for the quarry manager to measure stockpiles as often as the accounting department would prefer. We hear managers say, “Do they want me to make rock— or measure rock?”

The CFOs who spoke with us wants production levels to remain in alignment with 2016’s accounting plan. Accounting departments often struggle with various data entry sources from multiple people. Measurement information comes in from voice, email, paper and spreadsheets. Too often there are data error issues.

Is it unreasonable to want stockpile inventory tracking available on a real-time basis?

No. Our clients have discovered that utilizing a combination of iPhone and aerial (airplane or drone) imagery provides a complete solution. Mark Crain, of Lane Construction, gave a testimonial at AGG1 describing the company’s success using many sources of imagery for accurate perpetual inventory.

markcrain
Lane Construction’s Mark Crain speaks about success using iPhones, drones and airplanes for company-wide inventory management at AGG1.

The business benefits of using an iPhone and drone/airplane combination include:

  • Measuring with an iPhone is easy enough to use that anyone can measure stockpiles with minimal training, reducing outsourcing costs
  • Using an iPhone on the ground enables frequent spot-checks
  • Using aerial data by plane or drone provides ongoing quarterly, or monthly measurements
  • Aerial stockpile measurements provides material information for hard-to-reach, large, or dangerous stockpiles
  • Airplane flyovers are the fastest and easiest method to measure multiple sites across a wide geographical area
  • Stockpile Reports arranges flyovers and schedules them for your company
  • Stockpile Reports has the platform to process your data, regardless of aerial, drone or iPhone collection methods
  • Measurement results are automatically processed and available to corporate with no data entry
  • The measurement results meets the consistency and accuracy requirements of your company’s third-party requirements
  • iPhone and aerial measurement methods meet safety requirements
  • Competitive subscription pricing gives the company the freedom to measure year-round

Learn from what hasn’t worked before: don’t assume that this time things will be “different” when it comes to your monthly inventory results. Start now.  Make an action plan that will get you to your 2016 target. Contact us today for more information and ask about a demonstration— we can help.

 

 

 

Controlling Swings in Inventory with New Technologies

Monthly Physical Inventory Counts are the First Step to Controlling Swings in Inventory

Companies that achieve a more accurate perpetual inventory through monthly or quarterly physical inventory counts receive several positive business benefits:Image of New Technologies in Stockpile Inventory Measurement

  • Reduced financial write-offs
  • Reduced stock outs by ensuring there is adequate material on hand to support the business needs
  • Better business decisions (i.e. investment in resources or equipment) and the ability to set more realistic performance goals (i.e. incentives) based on productivity or cost-per-ton metrics
  • Meet and exceed audit requirements

Accelerate the Speed, and Reduce the Cost of Physical Inventory Counts Through New Technologies

Technological advances are now shrinking the time needed to perform company-wide physical inventory counts from 3-5 weeks down to 3-5 days. The costs to perform multiple quarterly, or monthly counts are now comparable to the historical price of one annual count. Significant advances in image processing, Software as a Service, drones, and phones make this possible.

Manual photogrammetric processes of the past are now fully automated thanks to advances in image processing and computer vision. High quality cameras embedded in drones, attached to planes, and built into cell phones are more highly available and easier to use than traditionally higher cost GPS and Laser based measurement technologies. The combination of high-quality low cost cameras, combined with advanced image processing enable rapid low-cost 3D modeling from imagery. Volumetric measurements generated from imagery are now an accepted form of aerial survey.

Software as a Service (or SaaS) is a way of delivering applications over the Internet, as a service. Instead of installing and maintaining software, companies simply access it via the Internet, freeing themselves from complex software and hardware management. SaaS companies leverage cloud computing to cost effectively scale operations to meet customer demand.

Leveraging SaaS, image processing, airplanes, drones, and phones makes it possible to accelerate the speed, and reduce the cost of physical inventory counts. The time to perform an inventory count is now only limited by how fast the imagery of stockpiles can be collected. Airplanes can be used to quickly take aerial imagery of hundreds of sites across geographically dispersed operations. Drones utilized by trained professionals – internal staff or external service providers – can be used to obtain aerial imagery at localized sites. And now even your phone can be used.

Using a combination of SaaS and image capture methods makes it possible to complete a company wide inventory in 3-5 days. Thousands of stockpile measurements can be generated from millions of images in just 24 hours. Finance and operations employees quickly review and approve data via a common website, with no need to manual enter or transfer data.

Visit us next week for the final post of this series about Inventory Management for companies with stockpiles: Putting it All Together.

(This blog is a continuation of last week’s post. Read: The Case for More Frequent Physical inventory Counts )

 

 

 

 

The Case for More Frequent Physical Inventory Counts

How many hammers and screwdrivers are currently on the shelves at your local hardware store on any given day of the year? The store’s management has a very accurate count of every product type. Products arrive in neat, countable boxes tagged with codes or RFID devices, and are subsequently sold using bar code scanners. The on-going perpetual inventory of those items is highly accurate, due to the traceability or measurability of the products. Accurate perpetual inventory enables stores to make data driven decisions Image of man looking at a row of shoeboxed inventory and a row of bunkers.that improve business operations, and reduce financial write-offs.

Unfortunately, accurate perpetual inventory is much harder to realize in the mining, construction and aggregates industry. That’s because our products don’t arrive neatly in boxes nor get tagged with barcodes. It’s hard to perform an inventory count, as our products are stored in all shapes, sizes, and environments. Our products also change weight, based on moisture and compaction. Our products can be “lost” through erosion and floor loss. We try our best to maintain and manage conversation factors for converting yards to tons. We also produce and sell in tons, yet we inventory in cubic yards or meters. And don’t forget the safety challenges!

Significant Inventory Errors

We have all become accustomed to significant error in our day-to-day perpetual inventories– and the end of year write-off. It is very common to hear a story of a massive, multi-million dollar write-off that a CEO and CFO had to explain to investors and shareholders. Everyone’s site or production manager has had to stand in front of an executive at one point in their career to explain how an error happened– and promise that inventory will be better managed going forward.

Companies in our industry 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.

Many of us have tried to manage perpetual inventory better by using scales to better manage production and sales. Scales are working well for tracking sales – but still generate variances due to moisture. Scales are being used for tracking critical production, but are challenging to implement for all production, due to cost and maintenance. Therefore, more frequent inventory counts are the most viable solution to addressing perpetual inventory accuracy.

Unlike retailers and manufacturing companies who perform physical inventory counts once or twice per 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 majority of CFOs and controllers would perform more frequent physical inventory counts if time and cost allowed. CFOs and controllers report that the major costs included in conducting a physical inventory count are attributed to management oversight, planning, measuring, reviewing and reconciling data, and updating financial systems. Add to this, the costs of labor and of time, to perform a count using internal or external resources. Every one of these labor and time costs are magnified by the range of a company’s geographic distribution.

Next week’s continuation of this blog post will be: Monthly Physical Inventory Counts are the First Step to Controlling Swings in Inventory

 

 

2016: Stockpile Reports Predicts It Will Be The Year of the Drone

Did you know that the FAA predicted there would be at least 1 million drones gifted during 2015’s holiday season? Drones were the must-have toy for 2015. If you live near a park, parking lot or open space, chances are high that someone is probably flying, or trying to fly a new drone there right now.

Stockpile Reports predicts that 2016 will be The Year of the Drone for businesses. Stockpile measurement by UAV will assist site inventory for mining, aggregates and construction companies in 2016.

Recreational drones arrived in many sizes, from big to small, this Christmas. This is a micro drone quadcopter.
Recreational drones arrived in many sizes, from large to small, this Christmas. This is a micro drone quadcopter.

Soaring Sales

The demand for recreational drones made them the a very popular toy for 2015. They are easily available, come in multiple shapes and sizes, and are relatively inexpensive. For example, you can even buy one at Macy’s. Recreational drones use sophisticated technology, requiring little to no training to operate.

It is much easier to buy a drone than it is to fly it. Here are some of the steps new drone users need to take before flying their drone:

1. Read the guide

2. Charge the batteries for the drone and controller

3. Install the app if it is a camera drone

4. Get the app to work with the drone. You might need to install an update.

5. You may want to register the drone with the manufacturer

6. Register your drone with the FAA

The FAA recently required that drones weighing more than .55 pounds and less than 55 pounds must be registered. That includes adding the weight of a camera to it. The FAA points out if your drone weighs more than two sticks of butter, you should register it.

Images: Drones are rapidly becoming an accepted stockpile measurement tool for mining, aggregates and construction companies.
Drones are rapidly becoming an accepted stockpile measurement tool for mining, aggregates and construction companies.

Soaring Interest in Flying for Business Purposes

Stockpile Reports  has observed a huge industry interest in stockpile measurements via Unassisted Aerial Vehicles (also known as drones). We’ve had many questions from our clients, asking our advice about measuring stockpiles with a drone. It’s not uncommon for an aggregates, mining or construction company to have a drone on-site, piloted by an internal resource. Similar to recreational models, purchasers have the ability to purchase whatever drone configuration and model that works best for their locations and needs, while purchase prices continue to drop.

However, companies that wish to fly a drone for business use are required to register with the FAA, and get a Section 333 Exemption. Here is the most recent list provided by the FAA of authorizations granted.

UAVs can be considered as a low-cost alternative to manned aerial photogrammetry, and can be advantageous to use for inspection, surveillance, mapping, and 3D modeling. Stockpile Reports has been measuring stockpiles by drone since 2013, in countries where the practice is already accepted and regulated.

From Your Drone to the CFO

Are you completing site inventory measurements with a drone? You fly the drone, and we’ll provide the report results. Business can process drone imagery with a StockpileReports.com subscription at no extra cost. It is your choice: fly an eBee, Phantom, or other drone type. Upload the data, and we’ll circle the piles for you. It only takes minutes to tag your materials. Measurement results are ready for the CFO, auditors and managers in hours.

Our patented platform provides accurate measurements from airplanes, drones or iPhone images. Stockpile Reports is easy to use, provides quick results in hours, and reduces write-offs. We have more than 120 companies in 14 countries who have measured over 200 million tons of materials utilizing our measurement methods.

If you are also excited about technology and how it can benefit your business, please contact us. We’re happy to talk about our success stories via drone measurement, and our experiences utilizing UAVs around the world.

Weather Your Seasonal Measurements

rainysite

This time of year is shoulder season, when temps and weather conditions are extremely changeable. Rain, wind, snow, sleet, storms, sunshine, dust, fog, heat and hail happen!

It doesn’t matter what is happening outside, though. Companies throughout the world still need to track inventory. Our clients in Europe, North America, South America, Australia and South Africa all share the same inventory challenges, despite how different the weather is at those locations.

Frequency, Safety, Efficiency

Make a measurement plan and be prepared for the weather.rainbow

Monthly: Utilize aerial measurements for site-wide inventory purposes each month.

Keep your boots off the ground. Measuring a site, or multiple sites, by plane is the fastest and safest method to gather data of all uncovered stockpiles. Here is how easy and fast the process is:

Step One: Client requests an aerial flight.
Step Two: Client tags the piles with material.
Step Three: Client view the results online.

Our customers typically spend 20 minutes of internal labor time per flight.

Online access to site and stockpile reports are available within hours after the flight. There is no action needed from clients other than tagging the outlined stockpiles online after the flight.

Daily: Go outside and make spot-checks onsite during operations. Simply use the iPhone in your measurement mix.

It only takes minutes for one of your team to measure an individual stockpile. You can also use the iPhone for inside and outside bunker measurements. If you’ve got a break in the weather, go outside and measure. There’s no need to wait for a third party to arrive and pay them to do the measurements.

Complement your ground-based imagery by drone. If you’ve got one and are certified to fly it, go for it! This might be a great solution if you have a few hours available to measure a smaller site, or very large stockpiles. Upload the data to us and we will process it and provide reporting.

The Best of Ground and Air

Whatever method you choose for measuring the piles on your site(s), the report results will be ready online in hours.

Your quarry will have the information needed to make operational business decisions on a weekly or monthly basis, and the CFO will have the numbers to manage inventory.

What is in Your Future?

We love the summer months. Customers are busy and we are, too. Client measurement totals for a recent week illustrates this clearly: over 500 stockpile measurements were made using the iPhone, aerial and drone, at over 100 different sites!

Did you know that the Stockpile Reports system supports multiple measurement methods? Although we are proud of our patent-pending iPhone® App and how easy it is to use, no two sites, nor two stockpiles are alike. Different piles each have varying measurement and access challenges. Your business receives accurate volume and tonnage reports for sites using the method that works best for that location and pile placement.

That’s why we also offer aerial measurements by plane or drone for subscribers. Consider using regular aerial measurements once a month for an entire site, and the iPhone for spot-checking individual stockpiles.

Tracking your stockpile inventory from month to month isn’t impossible. Let us take the guesswork out of the process, and make the future a little more predictable.

Our system is the only way to measure 100% of your site’s stockpiles, with online results available for view in 24-hours via our web portal. This enables your business get the best of ground and air for stockpile measurements.

Did you know that beyond the point of measurement, the Stockpile Reports platform also supports online reconciliation? This provides the data to the CFO quickly and consistently. Here is a shortcut to more information about our custom reports.

If you are a Quarry Manager, an Operations Manager, a Construction Sales Managers or a CFO and want easy, accurate measurements please connect with us. The Stockpile Reports team is ready to help.

 

Achieving the Goal: Stockpile Inventory Management

2015 is already half over. You only have six more months left to achieve your year-end targets. If you made a resolution last January to lose 10 lbs in 2015, there is still time remaining to make your goal— if you make changes to your habits.

A combination of measuring by iPhone and by aerial methods is the solution for gathering stockpile measurements for inventory.
A combination of measuring by iPhone and by aerial methods provides stockpile measurements for inventory.

Speaking of losses… how are your inventory numbers tracking to your 2015 plan? Are you afraid that the company will need to write off millions of dollars again at the end of the year?

Maybe you are assuming that this year will be “different”, and inventory numbers will come close to reconciling, without making changes in current stockpile measurement methods.

Stockpile inventory management is often a real source of ongoing frustration for the companies that have approached Stockpile Reports for help. The challenges of measuring the volume of stockpiled materials are many.

Accessibility, safety, costs, schedules and competing priorities make it difficult for the quarry manager to measure stockpiles as often as the accounting department would prefer. We hear managers say, “Do they want me to make rock— or measure rock?”

The CFO wants to ensure that production levels remain in alignment with the year’s accounting plan. Accounting departments often struggle with various data entry sources from multiple people. Measurement information comes in from voice, email, paper and spreadsheets. Too often there are data error issues, and sometimes the information arrives late.

Is it unreasonable to want stockpile inventory tracking available on a real-time basis? 

No. Our clients have discovered that utilizing a combination of iPhone and aerial (airplane or drone) imagery provides a complete solution.

The benefits of using an iPhone and aerial combination include:

  • Measuring with an iPhone is easy enough to use that anyone can measure stockpiles with minimal training
  • Using an iPhone on the ground enables frequent measurements
  • Using aerial data by plane or drone provides regular quarterly measurements
  • Aerial stockpile measurements provides inventory information for hard-to-reach, or dangerous stockpiles
  • Stockpile Reports arranges and provides certified aerial photographers to fly your site, and are trained to collect optimal imagery
  • Stockpile Reports has the platform to process your data, regardless of aerial, drone or iPhone collection methods
  • Measurement results are automatically processed and available to corporate with no data entry
  • The measurement results meets the consistency and accuracy requirements of the company
  • iPhone and aerial measurement methods meet safety requirements
  • Competitive subscription pricing gives the company the freedom to measure year-round

Learn from what hasn’t worked before: don’t assume that this time things will be “different” when it comes to your monthly inventory results. Make an action plan that will get you to your target. Contact us today for more information and ask about a demonstration— we can help.

Stockpile Inventory for the CFO

We’ve written in this blog about several issues in the field that cause variances in stockpile measurement results. These include belt calibration, third-party volume discrepancies, changing material densities, pile grooming, varying stockpile sizes and safety concerns. 

It is no wonder that many companies are unable to regularly track inventory of stockpiled material.

Operations managers know that tracking inventory from month to month is a hard problem to solve, and an inexact science.

However, the CFO has a completely different perspective on the inventory problem. Writing off millions, or tens of millions, at the end of a fiscal year is extremely painful.

Never Again

Enterprises are writing off millions of dollars due to inaccurate inventory numbers each year. Isn’t it time that our industry adopts modern, streamlined approaches similar to retail and automotive industries?

To mitigate painful write-offs, the CFO needs data: inventory measurements done regularly, and performed company-wide.

Explain a request for regular inventory measurements to people outside our industry, and they often assume that gathering and sharing company-wide measurements is an easy and standardized practice.

However, there are a variety of ways companies currently measure: by walking wheel, GPS, laser, drones, aerials and by ‘thumb’. The chances of being able to taking monthly stockpile measurements by one— or a combination of these methods— regularly, and consistently, seems to be wildly optimistic. Add to this mix the logistics of measurements across multiple sites, cities and states.

There’s more: how about adding the challenge of how to enter and reconcile all that data, from varying sources? CFOs get results via multiple emails, spread sheets, and application softwares.

It is no wonder that both the CFO and the Operations teams get very grumpy sometimes.

What if a stockpile measurement method…

  • Was easy enough to use that anyone could measure stockpiles with minimal training?
  • Didn’t have to be outsourced, and someone was trained how to do it at every site?
  • The results met the consistency and accuracy requirements of the company.
  • The results were automatically processed and available to corporate with no data entry?
  • Could be used on the majority of piles on a site?

Consider the iPhone

Many of you may have the measurement solution already in the palm of your hand! Accurate stockpile measurements with an iPhone is a current reality, and being utilized by clients in 12 countries. Notable domestic clients include the Texas DOT, Pete Lien and Sons and Knife River. Our domestic and international customers have measured more than 115 million tons of material so far using our platform!

Did you know that beyond the point of measurement, the Stockpile Reports platform also supports online reconciliation? This provides the data to the CFO quickly and consistently. Here is a shortcut to more information about our custom reports.

Production — Sales = Inventory

Remember that every stockpile is cash on the ground. Do you know how much cash is sitting on-site each month, or by quarter?

Don’t be surprised by what little you know at the end of the year. Start tracking and measuring your inventory now. Contact us today for more information about our subscription-based service and reconciliation features.

 

Inventory Management for Business Operations

What would happen if a coffee shop could not supply customers with a cup of coffee, or could only sell half a cup because the shop had run out of beans, with no visibility into when inventory was running low and when to restock?

Neighborhood grocery stores, bookstores, coffee shops, fast-food restaurants, distilleries, car manufacturers, computer makers and national retail chains all tackle the same challenges– of how to best manage and measure inventory—and use modern systems allowing them to do so successfully. The invention of the bar code such as the UPCthe RFID and the UID are a great examples of recent innovations proven to be invaluable for organizing data and tracking objects for various objects and industries.

Moreover, businesses now sell via several channels, not just in-store:inventory image

  • Online
  • Catalog
  • Phone
  • Mobile devices

Record-keeping and accounting has needed to evolve just to keep pace with these changes. The challenges of older accounting methods included:

  • Data maintenance and corrections
  • Difficult reporting, unable to see data in many ways and real-time
  • Too much reliance on the warehouse staffs who built the tracking system
  • Linking inventory data with other information

Think about how much time was needed to record and track inventory by entering data into Excel spreadsheets, using databases built in-house or manually with paper and pencil!

Businesses who wish to be competitive utilize real-time insight into sales and inventory data– especially if there are multiple site locations and sales channels. Managing inventory needs to be efficient, reliable, fast and accessible on-line. Even small and mid-sized businesses have come to rely on computerized inventory management systems. 

Electronic tracking systems can dramatically impact all phases of inventory management. Examples include counting and monitoring of inventory items; recording and retrieval of item storage location; recording changes to inventory; and anticipating inventory needs.  Some benefits of implementing improved business operations and processes are:

  • Better visibility of inventory levels
  • Product segmentation and classification
  • Utilization of forecasting methodology
  • Ready access to real-time and accurate material inventories
  • Minimizes working capital
  • Increases customer satisfaction through higher service levels
  • Maintain operations with little disruption

The ultimate goal of improved inventory management is the ability to control inventory quarter to quarter, preventing nasty surprises that can bite the bottom line.

The differences between retail access and inventory management of the past and of today have moved far beyond the invention of the bar code. Even the bar code has evolved past the sticky label. Lasers are now used to engrave bar codes on car parts. 

How has your yard or quarry’s inventory management system and processes evolved?

Have you had the opportunity to upgrade your processes? If not, why not?

We’ll share your comments and challenges on our blog next week. [contact_form email=”info@stockpilereports.com” subject=”Inventory Blog Post Comment”]