Recent efforts between the Gainesville Territory Manager and Florida QA managers resulted in an 80% auto-consumption improvement for “Deficit of Inventory” consumption failures this month!  Plant specific mix designs were modified via a mass substitution in Quadrel thereby reducing the “Deficit of Inventory” Auto-consumption failures from an average of 249/month to only 52/month in September in the Gainesville market.

Background

Since the 2016 SAP implementation project, Command Batch has been reporting auto-consumption of raw material usage to SAP each morning at 10:00 a.m. for the preceding day’s consumption.  This process is crucial for the accuracy of our inventory balances; however, errors can creates noise in our inventory variances and can result in incorrect end of the month financial reports.

Of the 3000 auto-consumption failures each month, 50% of those failures were due to “Deficit of Inventory”.  It was determined that one common reason for this error in Gainesville Florida was due to a combination of the plants limitation of raw material storage space and our standardized design mixes.  For example, in Florida, there are many DOT projects that require DOT stone.  In some cases it was decided to carry DOT grade stone and not carry Commercial Grade Stone due to these storage limitations.  When the standardized design mix called for Commercial stone, the plant would have to physically utilize the DOT stone, because that was all that was available on site.  This resulted in a daily auto-consumption failure for “Deficit of Inventory”;  The standardized Recipe in Command Batch would attempt to report a consumption of Commercial grade stone to SAP (0 inventory) when only DOT stone was in stock.  Therefore it took a manual adjustment to correct this error, each day, to ensure the current inventory balance in SAP was correct and our Financial Balance Sheet was accurate. 

Some sites employed a work-around and corrected the auto-consumptions only at the end of each month making the SAP inventory levels ineffective to use for current inventory levels.  As part of the Continuous Improvement Initiative, it was determined a daily manual adjustment was too burdensome and time consuming to perform each day.  The monthly auto-consumption adjustment was also creating inventory variance “noise” and making it impossible to determine the root causes of inventory variances.

So the Gainesville Territory Manager reviewed his “Deficit of Inventory” errors and reported the actual inventory stored at each plant to the Florida Quality Assurance Team.  They then modified the plant specific mix designs via a mass substitution in Quadrel.  This resulted in an immediate 80% improvement of the “Deficit of Inventory” errors for the Gainesville Territory.

Next Steps:

The next step is to work with the other area Operations and District Managers to identify any additional improvements we can share with QA to reduce our auto-consumption failures. 

 If you are interested in supporting the auto-consumption improvement effort, please feel free to reach out to the QA Team or the Continuous Improvement office.

For more information about Auto-consumption improvements please click here.