Manufacturing inventory strategies (Strategy focus)

Publication Date	October 2006
Publisher	Datamonitor
Product Type	Report
Pages	12
ISBN Number	not applicable
Product Code	DAT04205

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Summary

Introduction

Manufacturers are facing problems stemming from poor tracking of materials and stock within their production facilities. Now, these companies are looking to implement a range of strategies to ensure that costs are minimized and the level of service maximized.

Scope

This brief looks at outsourcing as a viable strategy for manufacturers and discusses where gains can be made, and some of the challenges associated.
Task or transaction interleaving is a strategy that makes sense for a lot of industry outsiders, yet is proving hard to implement in the warehouse.
Cross docking is on the lips of many manufacturers and distributors as it provides a way to significantly reduce inventory holding costs.
As ever, technology will play a large part in helping manufacturers solve their inventory management issues.

Highlights

Outsourcing has been a recurrent theme within the manufacturing industry for a number of years now, and it stands to reason that for warehousing, the same general principles apply. Logistics outsourcing in particular has been a key growth area within the industry with many companies now engaged in such contracts.

Reasons to Purchase

Understand what business strategies manufacturers are implementing to see where they will need help most.
Assess the opportunity for technology within manufacturing strategies to more closely target key pain points.

Content

Catalyst
Summary
Methodology
- AnaLYSIS
- Outsourcing warehouse processes can reduce cost and improve quality of service
- Shared space - pay for what you use - allows greater scalability
- Increased visibility can be a benefit of warehouse outsourcing
- Warehousing providers are able to provide a higher level of service
- Task interleaving lets manufacturers reduce travel time and associated costs
- Task interleaving combines multiple function lists
- The benefits of interleaving are significant
- Interleaving can help cut costs and improve flow-through
- Manufacturers can focus on different processes using priority based interleaving
- Cross docking seeks to reduce inventory holding and picking costs
- Cross docking effectively removes the need for inventory storage and picking
- There are multiple challenges associated with cross docking
- Through cross docking manufacturers can drastically reduce costs and improve cycle times
- Technology is helping manufacturers support warehouse and stock-related strategies
- A range of options are available to manufacturers looking to streamline warehouse and stock processes
- Vendor activity in the warehousing area has been mixed
Appendix
- Definitions
- References
- Extended methodology
Further reading
- Ask the analyst
List of Figures
- Figure 1: Task interleaving can significantly reduce travel time
- Figure 2: Task interleaving integrates several 'to-do' lists (simplified)
- Figure 3: Distribution cross docking relies upon a sorting area to redistribute shipments
- Figure 4: Cross docking processes focus on reducing put-away and picking