How a Client is Solving Write-Offs, Via Technology and Frequent Physical Inventory Counts

A multinational materials company that manufactures and distributes cement, ready-mix concrete, aggregates and materials including coal, recently approached Stockpile Reports. They were searching for a solution to reduce write-offs, time, and costs associated with inventory measurements across multiple sites.

Technological advances are now shrinking the time needed to perform company-wide physical inventory counts from 3-5 weeks down to 3-5 days. Measurement methods include the iPhone, drone, and airplane.
Technological advances are now shrinking the time needed to perform company-wide physical inventory counts from 3-5 weeks down to 3-5 days. Measurement methods include the iPhone, drone, and airplane.

The materials company had been performing inventory counts on multiple sites and regions. They’d hired an expensive third party survey team, who’d utilized a truck-mounted laser for measurements. Using a truck-mounted laser was accurate, but the costs associated with the surveys only allowed for physical inventory measurements to be performed once yearly.

During the rest of the year, team members kept a perpetual inventory by performing self-reported monthly estimates of material on hand. They estimated these amounts monthly, and sent the totals to the Finance Department.

As a result of not using current, accurate measurement data, the company had been experiencing major write-offs every year. This also corresponded with large financial swings.

Stockpile Reports was engaged to perform monthly physical inventory counts, utilizing a mix of measurement technologies. These included using iPhones, drones and planes. It was determined that using a combination of collection methods was the most appropriate solution. The location of material’s company sites are wide-spread across multiple states in the US. Each site also varied in material types, safety, stockpile placements and stockpile sizes.

The Solution for Write-Offs

Since the materials company has a company drone, a portion of one location is now measured monthly via drone for tall coal piles. This is in a high-traffic area, making it unsafe for ground measurements.

Bunkered material and smaller stockpiles are measured monthly with iPhones using internal labor. This is to spot-check incoming deliveries, and also ensure that outgoing deliveries meet production expectations.

A physical inventory count is conducted quarterly at all locations on the same day if weather permits, using Stockpile Reports’ flyover service. This is providing a running perpetual inventory for the company.

The Savings

The client recognized immediate costs-savings. There is no third-party labor needed to implement Stockpile Reports’ solution. The time-savings enables the company to perform company-wide measurements regularly. For example, the average time required using internal labor and Stockpile Reports’ flyover service was only 20 minutes per each site. Internal labor used for piloting a drone for site measurements averaged about 45 minutes per site. The average measurement by iPhone was 3-5 minutes per stockpile and bunker.

The materials company has successfully accelerated physical inventory counts, and are now performing monthly measurements. Measuring often, regularly, and accurately is the key to inventory control. They are making data-driven material handling decisions, and are greatly reducing financial write offs.

This blog post is a continuation of  “The Case for More Frequent Physical Inventory Counts” and last week’s entry “Controlling Swings in Inventory with New Technologies.

We are always happy to share our success stories. Contact us for more details about how we can assist your company and reduce write-offs.

 

 

 

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 )

 

 

 

 

Football, Business and Stockpiles

Some of the people who work at Stockpile Reports never tire of football season. The Super Bowl is a bittersweet event.
Image of football

Regardless of whether or not you are a rabid American football fan, there are many parallels between sports teams and business.

Players and Coaches

In all team sports there are key players with designated roles. Nearly every football player has a unique job to do, while also responsible for covering their teammates. Quarterbacks do not act alone—they are part of a team that includes players with speed, strength players, a staff of supporting coaches and excellent communication between the positions in the ‘field of play’.

Business managers are quite similar to football coaches. They have a playbook with instructions and strategies on how to keep their company advancing towards the goal. Managers and coaches train their players, making adjustments as needed, and know how to play to their team’s strengths. Managers ensure the team has the necessary equipment needed to help their company perform. Simply substitute football helmets and shoulder pads for company software and hardware equipment.

A team doesn’t only consist of individual players. There are also various departments who work as a team but also operate differently. For example, a business Sales and Finance team and an IT team have different skill-sets, but each support the other.

The Goal

Of course, the ultimate goal in football is to win, and be a consistent winner.

How about your business– does it have a plan for success, and a goal?

What is your strategy for achieving those goals? Similar to football players, does each member of your team know his/her role in moving the organization forward to achieve them?

Raising Your Score

Your managers on-site want accurate stockpile inventory, but to reduce third-party expenses and labor costs. The Finance team needs inventory data to be timely, documented and auditable. Workers want safe, fast results that follow best practices, are safe and MSHA compliant. The VP wants measurements made more often and the ability to manage several sites remotely to promote profitability and reduce risk.

If these goals sound familiar to your operation, you may want to revise your playbook and look to us for a competitive advantage.

Stockpile Reports provides the data and knowledge that will improve your entire operation, not just one part of it. Measure your stockpiles with new tools, such as an iPhone, by aerial, or drone. Add our stockpile and site reports into your mix for remote site intelligence.

How can our team assist your team? We’re here to help. Contact us today.

Top Benefits for Business

We are back from Australia and Hawaii, and have enjoyed meeting with our clients. They were consistently impressed with how easy our service is to use, and also with the quality and speedy reporting of their stockpile measurements.Stockpiles App UI

However, there is more to appreciate about our system besides the usability of our Stockpiles App, and online measurement results. Company financial teams and regional managers may not be able to collect data on-site, but they directly benefit.

Here are the top 10 benefits of using the Stockpile Reports System:

  • Increased Productivity: Collect data for each construction aggregates stockpile in minutes. Eliminate the travel time required by a full-time, survey team.
  • Greater Timeliness: Receive aggregates tonnage and volume calculations in hours, instead of days or weeks. Implement new, competitive business strategies based on timely data.
  • Greater Relevance: Calculate aggregates stockpile tonnage every day, week or month, instead of every quarter or year. Reduce safety stock.
  • Comparable Accuracy: Aggregates tonnage and volume calculations are comparable to stationary LiDAR and mobile laser scanning.
  • Automatic Audit Trail: Each stockpile has a visual record and timestamped report generated, allowing audit trails to be automatically generated for each stockpile measured.
  • Remote Site Management and Site Accountability: With each report, remote managers can visually inspect the quality and state of each pile to ensure proper site management.
  • Promote Employee Safety and MSHA Regulatory Compliance: Collect stockpile data by walking around stockpiles. Use each Site Report to plan, position and manage stockpiles more safely.
  • Simpler Training: Simply point an iPhone® 4S, 5, 5C, 5s, 6 while walking and using the video.
  • Lower Equipment Costs: Replace expensive LiDAR and GPS devices with an iPhone device.
  • Greater Consistency: Collect stockpile data using best-practice processes at every mining, quarrying, rock crushing and aggregates distribution location, every time.

Have you planned for a more efficient, profitable 2014?  Contact us to find out how your business can benefit from our service today. You may qualify for a no-cost trial of our service.