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 )

 

 

 

 

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.

 

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.

Prepare for the 2014 Holiday Season

The month of December presents a great opportunity to boost company operations and performance before the year’s end.December calendar

It is holiday season, but that doesn’t mean your company can’t be productive! Your business can prepare for missed measurements due to weather events and holiday time.

December has measurement challenges unique to this month: weather changes, travel, short work-weeks, and shortened attention spans due to holiday celebrations and planning. These challenges are shared for businesses located in both the Northern and Southern Hemispheres.

Some of our team members will be traveling to Australia to meet with clients later this week. The weather is warm and sunny ‘down under’. Although it’ll be a pleasant change from the cold temps in the US, we’re there to assist our clients and help them prepare for 2015.

Safety on-site is important year-round, but especially so in the holidays. A great advantage of using an iPhone to measure stockpiles is that the user doesn’t have to walk on piles to gather data. Using an iPhone is also quick and accurate– benefits for workers and for business. A shortened month doesn’t mean safety should be sacrificed for productivity— there’s no need to rush or cut corners.

Australia MapOur service enables you to measure and manage 100% of your stockpile inventory volume in under 24-hours. Get started this week. Read a recent blog post with tips on how to measure during winter if you are in the Northern Hemisphere. For those of you located in the Southern Hemisphere, view our tips on measuring stockpiles on sunny days. Neither snow nor sun should stop your company from measuring or auditing current inventory.

There are less than 30 days remaining in December, so get out there and measure! Management and finance teams will appreciate having timely data and use that to plan for 2015’s site operations. Utilize our service’s suite of measurement options and reports now.

If you have questions about the best measurement method for your site, please contact us. If you are a current client, visit the Customer Help area.

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”]