Moving Beyond Physical Inventory. Mike Hadley CPPS, CPIM The Boeing Company March 24, 2011 Originally presented at the NPMA National Conference June 6, 2007. Purpose of this Presentation.
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Mike Hadley CPPS, CPIM
The Boeing Company
March 24, 2011
Originally presented at the NPMA National ConferenceJune 6, 2007
Where is the “system” different? Where would additional insight to its behavior would be useful?
Sample size calculations** (Population ~= 50,000):
*Cooper, D., Schindler, P. (2003). Business Research Methods 9e. McGraw-Hill, 2003. New York, NY.
**MaCorr Market Research Online Sample Size Calculator. Member of ESOMAR, World association of research professionals. 2005.
Based on physical or electronic “touches” of the subject population as part of the normal production/use process. Any item not touched in a given period is inventoried.
“Electronic touches” are where the property’s physical existence is verified via an electronic signal, such as:
Physical touches include:
Occurs when an event triggers a convenient opportunity to verify inventory accuracy.
An example would be to verify the records:
Touches all inventories over a designated period of time.
A wall-to-wall typically is done in a relatively short timeframe and within a contained area in order to re-establish an inventory baseline.
It is necessary to apply a baseline or wall-to-wall inventory when:
1) correcting a previously identified process error, in order to “clean-up” the suspected population, or
2) when the random count method indicates that the process to maintain accurate inventories is “out of control”.
Utilized for root cause analysis and problem resolution. It is performed by:
Need to apply both a record to floor sampling, as well as a floor to record sampling.
All of the above Inventory Record Accuracy (IRA) methods can be applied to either sampling method.
ASRS bin quadrant Flue space clear
ASRS bin clearance Sprinkler clearance
ID Labels available to issue Serviceability tag
Package labels facing forward Multi-piece labeled
Packaging secure Shelf life date, labeled
Packaging – protective bag Box/package damage
Free of trash & debris Part numbers segregated
ExceptionSample Oversight Structure
FAR Rqmts. (annual)DCMA
SOX (annual)Deloitte & Touche
AS 9100 (annual)NQAR
Quality Dept. Internal Audits FAR Rqmts. (annual)
Internal Audits - Processes (As required or requested)
Government Property PCAB*
Materials Management PCAB*
M.M. Core Inventory Audits
Procedure/Process Reviews & Audit(tri-annual)
Process Owner Business Process Audits (weekly/monthly)
Process Control Point Metrics (daily/weekly/monthly)
Matl. Mgmt. Core
Gvmt. Prop. Mgmt
Functional OrganizationMaterials Management
DCMA = Defense Contract Management Agency MMAS = Material Management and Accounting Standards DCAA = Defense Contract Administration Agency SOX = Sarbanes-OxleyNQAR = National Quality Assurance Representative
*PCAB = PCAB = Preventative and Corrective Action Board
Isolate all of the suspect items in order to stop additional escapements or issues.
Clean up all past occurrences of the discovered issue, and bring all items to an acceptable state.
Eliminate future occurrences of the same or similar condition.