| Consultant's Corner |
by Bill Cowley |
| Happy New Year. What was your New Year’s Resolution? I know it was about Cycle Counting. (Don’t be nervous – I am a gifted psychic). Now is the time to get our Cycle Count program moving (again). We have made excuses long enough. Let’s get started… |
| What are we trying to accomplish with Cycle Counting? A good Cycle Counting process provides a periodic (preferably daily) sample of the system’s perpetual count compared to a physical count. Over time, this provides a glimpse into the entire material process accuracy. We won’t have to shut down for an entire physical inventory to find out how well our process is working. People change, jobs change, procedures evolve and suppliers change constantly. What was under control in August may have slid down a slippery slope by the end of the year. We must find out what is not working and why. |
| When we have a physical inventory, we disrupt the normal process to stop and count. And then, there is only time to count the parts and recheck a few parts. There is no time to discover why there was a discrepancy. After a physical inventory, we have to deal with the errors and not the reasons or corrections. As an alternative, cycle counts provide a less intrusive measure. An hour a day will provide constant feedback on the entire material process. We can research and identify deficiencies early and make all necessary corrections. |
| It is obvious we only have so much time to spend. How can we maximize our efficiencies? Let’s focus our energy and time on our big hitters and less on the noise. ABC analysis is a good way to keep the most expensive, most used, longest lead time parts on top of the pile. The value distribution report makes this analysis easier, but I will leave that for another article. |
| We need to count “A” parts more often than “B” or “C” parts. Let’s plan on counting all “A” parts in a 20 work day (1 month) “Cycle”, “B” parts in a 60 work day (3 month) “Cycle” and “C” parts in a 120 work day (6 month) “Cycle”. If you can, leave some pad in the plan for unexpected emergencies (like planning for only 20 workdays instead of 22 in a month). Now, do we have resources to accomplish the plan? Count all A-B-C parts in stores and divide by the cycle (in days). For example: 200 “A” parts / 20 days = 10 parts / day + 600 “B” parts / 60 days = 10 parts / day + 1200 “C” parts / 120 days = 10 parts / day, for a total of 30 parts / day. To count, enter, recount, research and update at .25 man-hours /part, the total is 7.5 man-hours / day. Can we commit to that plan? Either we commit to it or revise the plan to fit within our resources. There is no other real choice. |
| Once you are committed (to the plan and not the institution) begin the daily counts. Make sure the transaction cutoffs are maintained. I like to complete material movement and data entry at the end of the day and start each morning with the counts. Expandable has two Physical Count Worksheets: by Part ID and by Location. Remember that “Location” means Stock Status Location and not each Multi-Location location. It can be confusing, if you are not prepared. |
| When we generate the count worksheet, we have two choices. We can use “Count Days” or “Date Last Physical” for our selection. Count Days are convenient to set up and use but there is a hidden pitfall. ESI selects parts based if Date Last Physical + Count Days < Today. This is fine if we are going to complete all parts before the end of the cycle. If we don’t complete the parts, within the cycle we will miss counting the remaining parts and skip back to the beginning of the cycle. |
| If we choose to use “Date Last Physical” we must keep a log and always use the same date until no items are selected and then change the date for that ABC code to today. This will compensate automatically for any new parts. This gets more confusing if we have different ABC count quantities and generate separate worksheets for “A”, “B” & “C” parts. |
| Variances must be corrected, of course, but don’t forget to find out why the difference occurred at all. Once you know why it happened, you can change the process. This is the information that will thrust us into preventing errors instead of just chasing the corrections. |
| Monitor the results regularly. This is not a personal performance evaluation. It is a company performance evaluation. One person cannot make it work. It takes a Team. Errors should be expected but kept within accepted ranges. Keep track of variances, ABC cycle completion times and part’s “Date Last Physical”. Modify the plan to reflect the results. Poorer results need more frequent checking. Better results need less time for checking and more time for something important. |
| About Bill Cowley |
| With over 30 years experience in materials and manufacturing systems, Bill Cowley is principle of gurusome consulting where he helps Expandable customers in Southern California increase their usage of the Expandable system. Bill enjoys the challenges of working with interesting people in a diverse range of companies and sits as an officer on the IEUGA Board of Directors. Due to constant freeway gridlock, Bill is now addicted to audio books. |
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