The Stock Reconciliation Process
The challenge consisted in comparing the available stock in the 11 warehouses with the inventory records maintained in the ERP accounting module.
The company faced the following problems:
* A significant delta between the inventory in the ERP and the actual inventory
* Different methods of accounting for the incoming spare parts (original, alternative, etc.) depending on the warehouse
* Different methods of issuing obsolete spare parts depending on the warehouse
* Different frequencies of stock reconciliation depending on the warehouse
The savings generated were $300,000 annually (for a $81,000 investment), including cases that added rework costs, reopened cases increasing throughput time, cases that exceeded 30 days of throughput, and cases that exceeded 60 days of throughput—all with a significant opportunity cost.