One easy way to develop camaraderie in almost any business setting is to complain about forecasting; the weather of business. If you are talking with operations folks, just tell a story about your sales team's inability to understand the customer. If you are in sales, recall an example of a lost sale that was properly forecasted, but operations failed to schedule sufficient production. Either way, you will get many nods of understanding and empathy.

Inventory Control and Management Function	Blocking and Tacking
Mindset and education	Understand the impact that an accurate inventory, visual controls, cycle counting and other basics have on operations. (One real good idea is to pass this article out to your peers!)
Match accountability and responsibility	Understand the impact that an accurate inventory, visual controls, cycle counting and other basics have on operations. (One real good idea is to pass this article out to your peers!)
Role of technology	Understand the impact that an accurate inventory, visual controls, cycle counting and other basics have on operations. (One real good idea is to pass this article out to your peers!)
Visibility (external)	Understand the impact that an accurate inventory, visual controls, cycle counting and other basics have on operations. (One real good idea is to pass this article out to your peers!)
Visibility (internal)	Understand the impact that an accurate inventory, visual controls, cycle counting and other basics have on operations. (One real good idea is to pass this article out to your peers!)
View inventory accuracy in absolute terms	Understand the impact that an accurate inventory, visual controls, cycle counting and other basics have on operations. (One real good idea is to pass this article out to your peers!)
Counting	Understand the impact that an accurate inventory, visual controls, cycle counting and other basics have on operations. (One real good idea is to pass this article out to your peers!)
Location	Understand the impact that an accurate inventory, visual controls, cycle counting and other basics have on operations. (One real good idea is to pass this article out to your peers!)
Process	Understand the impact that an accurate inventory, visual controls, cycle counting and other basics have on operations. (One real good idea is to pass this article out to your peers!)

In preparation for a recent, speech I participated in a survey in which 83 out of 95 participants rated "forecasting" as a significant problem affecting the operations of their business. Forecasts are never accurate and precise. Their value lies in providing some boundaries for planning production and sourcing. Incorrect forecasts lead to excess and obsolete inventory, lost sales, overtime, waste, wringing of hands, and the gnashing of teeth.

When companies can replace forecasting with visibility, they enter a new world filled with firm schedules, planning horizons, peace and love.

Consider these definitions:
Forecasting: Predicting the future. Examples might include the estimating of future orders, regressing historical purchases, or analyzing trends in order to predict future orders.

Visibility: Seeing the current need of existing customers. Examples might include vendor managed inventory, remote telemetry, sharing of point of sale data, or access to customer production schedule information.

Any choice between relying on forecasted sales or visibility to customer activity is easy to make, theoretically. That choice is harder to make in practice. To increase our ability to use visibility we have to change customer behavior, implement various procedures, change our relationship with suppliers, and adhere to new disciplines.

The same is true in regard to inventory control and management.

This article starts with a discussion of forecasting and visibility because it is a metaphor to which many of us can relate. By comparing inventory management and forecasting we can begin to discern the appropriate methods to manage inventory.

Consider the impact of the following:

• Periodic (quarterly or monthly) physical counts of the inventory to correct the accounting records
• Building or sourcing components that already exist, but can not be found on a timely basis
• A job or project is not initiated because the system incorrectly shows insufficient inventory on hand to complete the work
• Halting a project or job because inventory the system indicated as available was not actually available or could not be found
• Production is slowed or halted because the warehouse guru is unavailable to locate needed inventory
• Turnover is a painful reality because new workers must be trained to find components in the warehouse
• Production schedules are driven primarily to maximize machine utilization

Consider the impact of these alternative examples:

• No physical inventory count is required because the perpetual inventory is demonstrated to be consistently accurate through a well-managed cycle count program.
• The inventory shown on the system is always correct
• The system knows where to find the inventory, and those locations are well marked
• No project is started unless sufficient inventory is on hand
• No project is delayed if the inventory is actually in the building
• Employee turnover has little effect because even a new worker can find needed inventory with little training
• Anyone walking through the plant (even an executive or consultant) can tell if inventory is in the right place in the right quantities
• A portion of production scheduling is driven by visual cues

These are the examples that define an effective approach to inventory management and control. These examples are to inventory control and management what visibility is to forecasting.

In football, blocking and tackling are the basic components of a solid game. No game is won without good blocks and effective tackling. Many games are lost without them.

There are some companies that push the inventory management envelope, creating legendary results as well as difficult decisions between competing and effective approaches to managing assets. Those companies are rare.

More common is the company that suffers lost sales and exploding inventory levels. As comforting as it might be to blame these losses on poor forecasting or computer programs, the real problems lie closer to our day-to-day activities. Contrary to most beliefs, rising inventories result in reduced customer service. Repeat the following sentence until you believe it: "Rising inventory levels impair timely delivery, fill rates and shipping errors".

Sound inventory management practices keep customers happy and improve business performance.

Blocking and tackling win games.