Excess inventory tends to hide problems on the workshop floor, which must be identified and resolved in order to improve operating performance. Excess inventory increases lead times, consumes productive floor space, delays the identification of problems, and inhibits communication. By achieving a seamless flow between machines and production lines, many steel businesses involved in manufacturing, fabrication and building have been able to improve customer service and reduce inventory and associated costs.
The Steel Efficiency Review® process recommends operations and productions teams to make what the customer wants when they want it, pulling only what is ordered through your work flow. Excess inventory causes increases in direct physical costs and indirect costs such as the transportation and movement of this inventory, the space required to store it, the administration of keeping track of it, the damage and losses that can occur, the cost of writing off materials that become obsolete, even the costs of insuring it. Many businesses fail to eliminate excess inventory as a waste as they simply won’t change current purchasing and forecasting methods or are not convinced on the improvement or change required.
We have found if you could eliminate or possibly reduce excess inventory the savings would be straight back on your bottom line improving the profit in your business. The Steel Efficiency Review® aims to challenge this way of thinking to provide recommendations to change and improve our customer’s business and at the same time our product and service offer.
Download our State of Market Reports for our insights and learnings after completing 1,011 Steel Efficiency Review® consultations on businesses of all shapes and sizes across Australia. To register for your own FREE Steel Efficiency Review® click here.