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.

 

 

 

What is Accuracy?

When someone asks you if your watch is accurate, what do they mean?

wrist-watch image
Is this watch keeping time accurately, or precisely?

Let’s first compare accuracy and precisionA measurement can be accurate without being precise.

Now that might sound confusing. That’s because many people use the words ‘accuracy’ and ‘precision’ interchangeably.

Those words are actually different from the other. Accuracy is the degree of conformity of a measured or calculated quantity to its actual (true) value. Precision is the degree to which further measurements or calculations show the same or similar results.

Let’s go back to the watch comparison: Accuracy is usually meant as the ability of a watch to keep time, as measured against a certain reliable external standard, or the “degree of conformity.” If a watch matches the time signal reasonably closely to an atomic clock, (for example, within 10-20 seconds of variance every month) most watch owners conclude that their watch is “accurate.”

Scientists usually refer to precision when they say a clock, or watch is precise if it will gain or lose a second over millions of years compared to an atomic clock. In fact, an atomic clock itself keeps time so precisely that it will neither gain nor lose a second for the next 15 billion years.

Image of salt pile.
Measure physical inventory accurately and consistently to reduce write-offs.

Our customers tell us that conducting precise stockpile measurements is both expensive and time-consuming. This often involves working with a third party with related expertise. It is not only expensive to hire surveyors or a measurement team, but the logistics can be difficult. Hiring an outside firm takes preparation time, and even causes sites to temporarily shut down production for safety reasons. This makes it difficult to take precise measurements more than a few times a year.

We certainly appreciate precision, but a lot of changes can happen to stockpiles in between precise measurements, if measurements are only made every six months, or once a year! Yet, that’s what often happens.

True inventory management and control arrives through frequent measurements, performed consistently. Measuring by plane, UAV (drone) and iPhone enables our subscribers to accurately and safely measure stockpiles weekly, monthly or quarterly.

We are proud that there is no need to hire a third-party to perform physical inventory. Our service is push-button simple: a load operator or a VP can measure the same stockpile, at the same time, and receive consistent report results.

Not only is it easy, but our patent-pending platform also returns highly accurate results. Our accuracy rate ranges cluster to within a few degrees of a precise measurement. This makes keeping track of physical inventory reliable and predictable.

Accuracy and Consistency

Consistent, frequent, physical inventory measurements reduce inventory discrepancies. Company financials require less adjustments. Our patent-pending platform also reduces labor costs, and improves worker safety.

Intrigued? Contact us to find out how your business can benefit from utilizing our service today.