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Optimize Inventory Management

optimize-inventory-management-banner IBM reports that 54% of Chief Supply Chain Officers will be optimizing their inventory management to help control and reduce costs. To accomplish this, they’ll demand increased visibility and more robust business intelligence derived from all aspects of the supply chain. Fully optimizing inventory management requires systems that not only provide operational control but also provide accurate inventory data to a company’s enterprise-wide planning systems.

The Road to Inventory Optimization

Inventory optimization begins with knowing what you have and managing it well. Many businesses spend money to expand without upgrading seemingly innocuous procedures, such as effectively managing inventory. Attention is focused on the challenges of day-to-day business—without much thought given to seemingly mundane tasks. More than likely, management has investigated implementing an automated inventory management system but hasn’t made it a priority; that is until the cost of inefficiency becomes glaringly and sometimes punishingly obvious. iStock_000015966119Substitute inventory control processes that use programs like Excel or Access are typically used to record items on hand, and counting of inventory is done manually. Unfortunately, items can easily be miscounted and data entry mistakes are just as easy to make—even a skilled operator makes one error in every three hundred keystrokes. This incorrect data, if captured by a company’s systems, can cascade throughout the supply chain management and accounting programs; wreaking havoc with inventory forecasting, audit reporting, and customer service. Once in the system, these errors are hard to detect and harder to remove. Sometimes there may be unsuccessful attempts to shoehorn inventory control into a corporate information system (CSI) inappropriate to the task, such as enterprise-wide resource planning software from SAP or Oracle. Often, companies experience all of these frustrating aspects of unsuccessful inventory management before seeking out solutions designed specifically to track and manage stock.

Precision Drilling

Precision Drilling Primes the Pump with Wasp Inventory Control
Precision Drilling is a $900 million dollar plus company with over 500 drilling, service, and snubbing rigs. Its Niksu support center near Edmonton, Alberta, is responsible for maintaining this large array of complex equipment, all essential to its ongoing operations. The center’s 11 technicians manage a large inventory of parts that cost thousands of dollars each. Precisions’ repair techs had a classic inventory management nightmare, with their stock numbers based on manual updates after staff physically searched out each item. Data was stored in Excel, with all the inherent error problems of manual recording and data entry. There were no quickly accessible records of a part’s history or usage. Rather than rummage through one of many warehouses, it was often faster to express order the replacement part, even if that part was later found in stock. Many repairs at Precision are mission critical, so they bore the cost burden of duplicate parts ordered and the needless expense of express shipping. Inventory data was unreliable and unavailable to Precision Drilling’s enterprise-wide ERP system.

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Wanting better inventory cost control and increased efficiency, Precision Drilling explored several inventory management solutions: its priorities were quick set-up, ease-of-use, and reliable reporting and tracking. After some research, they partnered with WASP Barcode Technologies, buying Wasp Inventory Control, a WDT 3200 mobile computer, and a Wasp WPL305 barcode printer. Precision’s repair techs used the WASP system to optimize their inventory management, employing the system’s features to locate parts, track quantity and capture key item attributes, such as cost, location, and storage options.

Two-fold Optimization

The repair facility easily realized an ROI within six months and saved two days of labor per month

Precision Drilling’s partnership with WASP optimized inventory management at both the facility level and at the wider corporate level. The repair facility easily realized an ROI within six months and saved two days of labor per month; freeing skilled techs from manually hunting for parts. Additionally, the data tracked and then retrieved from Inventory Control is available to the company’s ERP system—therefore, giving Precision Drilling the ability to fully optimize their inventory management at an enterprise-wide level.