Issue link: http://www.e-digitaleditions.com/i/375553
18 FEDA News & Views continued on page 25 Purchasing continued Remember, these items have the great- est number of transactions in the loca- tion, so even one day without inventory could be fairly significant. Ideally, you would drop the number of stock-out days to zero for these critical items, but that may not be possible. Our goal was to drop it below five on a consistent basis. If we could do that, the sales team would start believing that purchasing was com- ing around to the "buying what we sell" point of view. Cleaning up days out of stock can be done several different ways in the system. My favorite remedy is to simply bump up the safety stock percentage to 100 percent on these items. What this means is that we will be creating a layer of safety stock equal to the average units sold during the lead time. If your system requires you to put in days of safety, then you would put in a number equal to the average lead time. In some systems, a user can put in a protected quan- tity. This is similar to a Min in a Min/ Max replenishment method. All of these tactics will increase the inventory levels on the top 100 items and significantly reduce the number of back orders. Plus, it will make the sales team happy. Ok, maybe it will help them whine a little less. Either scenario is a feather in the inventory management cap. Winning the Trust of Branch Managers As I have mentioned in the past, my consulting practice tends to run in themes. The topic of the moment seems to be finding the balance. Fresh off the coaching session with my cur- rent client, I sat down with a prospect challenged with multiple locations. The owners of the organization had charged my prospect with more effectively man- aging their inventory asset. In addition, the company would like to move away from branch-directed replenishment and create a more efficient central purchas- ing team. As I looked over this massive spreadsheet detailing turns and custom- er service percentages, it dawned on me that the key to a successful transition was all about gaining trust with the branch managers. When a company moves to centralized purchasing, branch managers relinquish the power to handle the needs of their local customer base. Since most branch managers are sales-driven, this is not a comfortable set of circumstances. Most of them can see the logic in a centralized scheme, but there is still the fear that their customers are too far away from the person pulling the replenishment trigger. If the company wants to make a smooth transition, they can't overlook this fear. Similar to the example above, the new central purchasing team must