The Numbers You Need to Know: Promises

You’re standing in line at the local donut shop (I was tempted to do coffee again but who doesn’t love a good donut?), looking at the trays of offerings and some other guy has pulled into the drive-thru. You bothered to park and get out of your car, walk in and wait to talk to a person. (Good for you, by the way, and please remember to look them directly in the eye, and address them by name when you say a genuine thank you for helping you.) You are, after all, eating a donut and the few extra steps are a great idea.

The line for the drive-thru was long. It’s what stimulated you to get out of the car and go in. You will, perhaps, get faster service. You can see what they have. Or can you?

PROMISED INVENTORY

We do not work with retail stores, but this is a situation you may run into every day, so I use it for the sake of example. You’re standing there, looking at a Boston Crème, (and in looking that up I just found this article that talks about the difference between the crème donuts and learned that Dunkin Donuts took the word donut out of their name and now refers to themselves as a coffee company so I’m back to my favorite topic.) when you realize that the person behind the counter is putting the last two on the tray in the bag, headed to the side window. That guy, drat him, that pulled through the drive lane, purchased your donut!

I’m not trying to start a war over breakfast treats. But that was a painful lesson in promised inventory. And, trust me, I realize that’s a first-world problem. Take the sour cream cake donut if they have it – fantastic in coffee.

Promised inventory are the materials and products you have currently that are already spoken for and still on the shelf. In the case of you standing in line, you can see your intended purchase there on the trays in front of you but someone has already paid for it and it’s gone before you take one more step forward. If you’re in manufacturing, promised inventory is a tricky and rarely solved thing. It’s enough to drive you crazy.

too many jobs or orders?

Heck no! You’re in the business of taking orders and making money. There are NEVER too many jobs or orders. Seriously, this does not start with too much of anything. It’s just a data problem.

We’ve been talking the last few weeks about the three most important “numbers” in your shop – your people, processes and inventory. I know very few things in manufacturing, and especially very few problems, that do not involve all three. This is strictly a data problem. You have a silo between your inventory and your process. It is the order process, but it’s a function of communication rather than volume.

The minute you take (accept) an order from a customer, you’ve committed to doing the work. If you have doubts about that, there’s little we can do to help. You have your company name on the line to pick-and-ship, assemble, build, make, or source that item that they asked for that you said you could provide. However you’re going to go about getting it, you have a delivery to make and a contract (Purchase Order) to fulfill.

what you have

Promised inventory, for a system, is a complex thing. It requires the system – whether that is paper, human (Bob does that…), or digital – to know the work you have and the work that’s coming. It must be able to calculate how much of each particular type of inventory is required to do that work. It must verify how much you have in stock and where it’s located to see if you can get it to the person on your team that needs it by the time they do. And, it needs to be able to “set it aside” so that others can’t snag it. Finally, it should tell you where you’re short on inventory or warn you when you’re getting low on thresholds. More on that in future blogs.

the parking garage

Next week, we’ll talk about how parking garages are using systems to do promised inventory and how convenient that is for customers. It bypasses a lot of angst for their customer base. What are you doing to help yours? Whether that customer is internal or external, you need to have them in mind when you answer the question “do my current platforms give me all the data I need in inventory to make my shop efficient?”