DSI Blog


Back to Supply Chain Basics: Transforming Inventory

Posted by on November 2, 2016 12:30 pm

When it comes to the supply chain, it’s easy to make things complicated. And when today’s consumer expects full visibility into where their product is—until the moment it reaches their front door—inventory management grows in complexity. It’s time to get back to basics.

In my last post, I paraphrased “Bull Durham” to boil down supply chain to its simplest parts: You buy the inventory. You transform the inventory. You sell and service the inventory. We’ve covered the first stage, buying inventory, and how greater visibility can prevent rework, downtime and returns. Now we move onto the second stage: transforming inventory.

After companies receive raw material or componentry, they add their value through various transformations of manufacturing or packaging. In many industries, this is an area where companies set themselves apart from the competition through low cost, specialization, extreme configuration or a combination of all.

Just as it is when buying raw material or componentry, inventory visibility and the status of that inventory is critical when it comes time to transform it into the final product. If companies have embraced a lean approach, the visibility and status of that inventory becomes even more critical. A stock out, or non-conforming material can shut down a production line, resulting in missed shipments, rework and other non-value added activities Worse, such delays quickly erode margins and impede the ability to meet customer expectations.

Transforming Inventory in the Digital Age

Fortunately, digital technologies present an opportunity to automate and connect inventory transformation processes. Many machines used in transformation today have the ability to provide information to the enterprise on their performance and output. The ability to tap into and utilize this information has been referred to as machine-to-machine (M2M) communications, the Internet of Things (IoT) or the Industrial Internet of things (IIoT).

Regardless of the acronym, the capability now exists to provide a new level of visibility and status updates that’s been hard to bring to the enterprise in the past. Being able to see how the transformation processes are progressing through the use of this connectivity provides more accurate and timely status updates. M2M/IoT makes this process instantaneous by cutting out manual data entry.

For example, if you can see that one of the machines is trending toward control limits, you can intervene before it exceeds the limit. Doing so can help to prevent non-conforming material being produced, which would otherwise lead to rework or scrap. Tracking other variables of machine performance also helps to ensure reliability programs and protect the investment. Additionally, it ensures you can continue to produce products that meet and exceed customer expectations.

Inventory Transformation Meets Complete Transparency

How do you keep the line moving to exceed customer expectations? The DSI Digital Supply Chain Platform (DSCP)™ provides the inventory visibility of location and status to ensure attainable production schedules. The DSCP also has prebuilt applications created with the end user in mind to make transactions as easy as possible while enforcing required business rules such as recording data points of inventory issues/backflushing or quality specification at designated points in the transformation process. The result: enhanced visibility and status updates for all that need to see.

DSI has provided M2M connectivity for years to many customers. The DSCP can bring the required data from machines to record completions, weights, dimensional data and other data to free up operators for more value added tasks. Additionally, the DSCP digitizes the business processes around the results of that data through methods such as text messaging, emails and approvals, or by placing various jobs on hold. These functions help improve visibility into the status of the inventory through the transformation processes.

As you change your business processes through various Kaizen or Six Sigma events, or look for different assets and tools to increase your competitive advantage, the Digital Supply Chain Platform can help enhance and integrate these changes.

Are you considering adding value to your inventory transformation processes with greater connectivity? Contact us to start the discussion.

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