Best Practice in Inventory Management - Customer Service Insights
Dr. Tony Wild's insights on customer service in inventory management, covering availability, on-time deliveries, despatch performance, and managing arrears. Gain valuable knowledge from detailed figures and comparisons presented in this chapter.
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Presentation Transcript
Best Practice in Inventory Management Chapter 2 Customer Service Customer Service Dr Tony Wild Best Practice in Inventory Management
Figure 2.1 Availability & Inventory 100 % For each item Stock Availability 0% Cost of Inventory Dr Tony Wild Best Practice in Inventory Management
Figure 2.2 Alternative Measurements of Availability Figure 2.2 Alternative Measurements of Availability Part No. Demand Shortage Service No. of Shortage Service Level (%) Orders Level (%) A12 1000 10 99.0% 5 1 80% B25 10 5 50.0% 1 1 0% Average 74.5% 40% Sum 1010 15 98.5% 6 2 66.70% Dr Tony Wild Best Practice in Inventory Management
Figure 2.3 On Time Or In Full? Figure 2.3 On Time Or In Full? Current Performance In Full What do typical Customers need? On Time 100% 100% Dr Tony Wild Best Practice in Inventory Management
Figure 2.4 Comparison of Despatches for Companies A & B Figure 2.4 Comparison of Despatches for Companies A & B Analysis of supply Company A Company B Delivered on time 10 30 1 week late 60 15 1 month late 20 40 3 months late 10 15 Total despatches 100 100 Dr Tony Wild Best Practice in Inventory Management
Figure 2.5 Despatch Performance for Companies A & B Figure 2.5 Despatch Performance for Companies A & B Company A Company B 70 60 50 40 30 20 10 0 Delivered on time 1 week late 1 month late 3 months late Dr Tony Wild Best Practice in Inventory Management
Figure 2.6 Distribution of Arrears Time Overdue No. of Items Weighted Average (T x N) 8 12 12 8 5 45 T (weeks) 1 2 3 4 5 Total (N items) 8 6 4 2 1 21 Dr Tony Wild Best Practice in Inventory Management
Figure 2.7 Managing Arrears Figure 2.7 Managing Arrears 14 Number and Weighted 12 10 Weighted Average (T x N), Average 8 6 No. of Items (N items) 4 2 0 1 2 3 4 5 Dr Tony Wild Best Practice in Inventory Management
Figure 2.8 Customer Order Process Figure 2.8 Customer Order Process A Order processing with accurate stock records B. Order processing with inaccurate stock records Customer order receipt Customer order receipt Check Credit Worthiness Check Credit Worthiness Issue pick/ despatch notes Inform customer Issue picking list Pick and confirm availability Pick & despatch with note Occasional Discrepancy Send despatch note with goods Create despatch note Identify Shortages Alter stock record and record arrears Inform customer Part ship with despatch note Expedite Supply Resubmit awaiting stock order Alter stock record and record arrears Expedite Supply Resubmit awaiting stock order Dr Tony Wild Best Practice in Inventory Management
Figure 2.9 Consuming the Forecast Figure 2.9 Consuming the Forecast Forecast Maximum Limit Sales Orders Current Order Book New orders received 1 2 3 4 5 6 Time (in days or weeks) Dr Tony Wild Best Practice in Inventory Management
