DOM-UK struggled in the past with stock management. Annual inventories were challenging and would take four days to complete. The company had large quantities of old stock that had not moved for years – culminating, for instance, in dead stock provisions that might reach £200,000 for a stock value of £600,000.
DOM-UK discovered that numerous stock discrepancies came from small components that had not been included in a bill of materials - meaning that the company’s Navision Enterprise Resource Planning did not deduct these stocks when accounting for finished products.
In part, this is because the production staff had exclusive responsibility for stock takes.
Driven by its new long-term strategic vision, DOM-UK changed course.
Today, when DOM-UK comes to the end of its financial year, it relies on both production and office staff members to conduct a full stocktake counting all parts. Alongside of this, partial stock counts are carried out twice yearly. Here the count only covers the highest value items, amounting to ca. 80% of the total stock value.
In addition, the dead stock report is now produced on a monthly basis and includes a gap analysis to identify any variances. These are then reviewed to justify changes in provisions.
Quality teams have also started doing a monthly count of scrap keys to ensure that stocks can be adjusted immediately where this is necessary.
For pins and tumblers that have not featured in a bill of materials, DOM-UK staff now insert negative adjustments into the system every time a bag is taken from stock. On top of this, today there are monthly counts of such items’ stock levels, with any discrepancies being written off.
By implementing regular inventory counts, the whole process has been cut from four days to two, translating into two additional production days a year before facilities close for their annual shutdown.
DOM-UK has also drastically reduced counting errors due to staff’s greater familiarity with processes and weighing machines.
Monthly dead stock analysis now highlights products that were being accounted for in the past despite representing system call-off orders. Staff can determine which products have not moved for a very long time. This has led to DOM-UK disposing £26K worth of stock, reducing its levels of provision and releasing space in its workshop areas.
