Manufacturers across the globe are always looking for new ways to meet aggressive goals around inventory optimization and working capital improvements. One crucial step in developing a systematic approach to inventory optimization is to establish a dedicated team that can strategize and execute these important business objectives.
My company’s most successful partners are implementing Inventory Attack Teams to launch inventory reduction initiatives and focus key players on the most impactful actions each day. I’m happy to share how to deploy this tactic at your own company to reduce excess inventory and improve on-time delivery.
What Is an Inventory Attack Team?
An Inventory Attack Team (IAT) consists of key stakeholders across your supply chain organization who collaborate regularly to optimize daily inventory opportunities. The IAT strives to drive an effective, sustainable process to attack the biggest daily inventory optimization opportunities across complex teams with multiple sites and ERP systems. This approach helps you align inventory stakeholders around advanced analytics and standard processes for long-term results.
Generate Prioritized Inventory Actions
It’s vital to generate prioritized inventory actions to guide attack team conversations and help members focus on the most impactful tasks each day. An inventory action report can unite people, processes and inventory data, enabling key players to seize immediate savings opportunities, identify root causes and raise the visibility of successes that are driving real business results.
An Inventory Actions Report achieves this through the following actions:
- Attacking the top inventory actions at each site every day, prioritized by business impact.
- Empowering the right people and holding them accountable.
- Establishing communication channels and repeatable processes.
As your IAT helps you tackle critical daily actions to reduce inventory and drive sustainable savings for the business, you can expect long-term outcomes. These include greater consistency of inventory data and reporting processes across the business, improved collaboration around inventory goals and increased visibility into inventory opportunities across buyers and sites.
Assemble Your Inventory Attack Team
The first step is to identify the members of your IAT. Select representatives from the supply chain or procurement teams at each site across your organization and get their buy-in to participate in this cross-functional initiative.
The key roles on your Inventory Attack Team should include:
- The Corporate Supply Chain Leader: Typically VP-level who is ultimately accountable for procurement, inventory optimization and other supply chain functions globally.
- The Inventory Attack Team Lead: A senior staff member on the corporate supply chain leader’s team with a deep understanding of business and data systems. This individual takes the lead in orchestrating action reviews, driving task completion and organizing reporting.
- Site Supply Chain Leaders: Responsible for procurement and inventory management at individual sites.
- Buyers: Responsible for purchasing items, completing or escalating inventory actions and updating statuses at the respective sites.
Schedule Kick-Off and Meeting Cadence
The second step involves establishing a communication cadence and channels. Once the team is established, the Inventory Attack Team Lead facilitates a kickoff with site representatives to bring key players together, provide an overview of the IAT’s purpose and set measurable goals. This includes creating a process to address the highest-value inventory issues each day for immediate business impact, reviewing and escalating issues that can’t be fixed, and improving operations over time.
During the kickoff meeting, it is recommended to define your “Unable to Fix” categories in your Inventory Actions Report. These categories will help you identify common themes over time and address them effectively.
Additionally, a review cadence should be established for the top 10 inventory actions per day (or week) per site, prioritized by value. These actions should be supplied to the team in your Inventory Actions Report. Initially, you may find only a handful of actions per buyer at each site. The Inventory Attack Team Lead drives the review process, filters the actions and facilitates discussions around the Inventory Actions Report with the entire team.
Driving Results Through Daily Accountability
The third step is to drive inventory results through daily accountability. All site leaders must be prepared to discuss each action they are responsible for from the list, as their buying teams should be actively working on their top 10 actions every day. To facilitate collaboration, it is essential to establish a common terminology. This process should be continued on a week-over-week basis to ensure sustained results and solidify new processes.
By implementing an Inventory Attack Team, your organization can effectively implement an inventory reduction initiative. By gathering the key players – site supply chain leaders, senior supply chain analysts, buyers and the corporate supply chain leader – and establishing a process for reviewing Inventory Actions while holding everyone accountable, you can achieve quick inventory wins. Over time, the IAT model enables sustained results by solidifying new standard work processes and driving ongoing collaboration, ultimately helping your business meet its inventory optimization and on-time delivery goals.
Richard Lebovitz (pictured, above left) is CEO of LeanDNA, a supplier of inventory optimization software for global manufacturing industries.