How Much Inventory Do You Really Need? A few years ago, I implemented an SAP? ERP system for a subsidiary of an Australian arms manufacturer. The company was setting up a manufacturing plant in Tucson, AZ. The Iraq war was at its peak. It was mandatory that the company manufacture their product in America, and they needed to ramp up production fast to produce enough to support our forces in Iraq. During a requirements-gathering workshop, the plant manager told me that companies producing similar products turn their inventories at three. He wanted to turn his at six. What processes did he need to make that a reality? (As you probably know, a ?turn? is a technical term in inventory management that measures how fast you convert raw materials into finished products. The larger this number, the lower the inventory; e.g., a turn of four means that the raw materials procured today will get converted into a finished product in three months because the inventory turns four times a year). I had spent over a decade consulting on various ERP solutions for manufacturing enterprises, and I had hands-on experience implementing supply chain solutions for enterprises large and small that employed a

Single Use Replenishment (SUR?): A comprehensive planning solution for recognizing and servicing demand spikes in your supply chain? today! In my earlier blog post, Why are we busy pushing? Pull your plants for a LEANER Supply Chain…Today , I concluded that no one wants to build to forecast, but most of us do exactly that. I also argued that you don?t have to be in a perfect LEAN state to build to customer demand. You can do this in your own environment, starting today. You don?t have to accept the inefficiencies of building to forecast?there really is a better way. In another blog post, Can You Plan Using Push and Execute Using Pull?, I explained why it is necessary for us to employ a different planning method in a demand-driven, pull or LEAN environment. Solutions like LEAN PLANNER? scan the planning horizon and calculate the buffer size (KANBAN/ROP) for the entire time horizon. You now have a dynamic LEAN plan that adjusts itself to the changing demand profile. You can see dependent demand across all the levels of product structure on supply chain nodes that are managed entirely by pull. Variability is the biggest enemy of a LEAN supply chain.