Go Back   Forums > ISM Discussion Area > General Supply Management Discussions

Thread Tools Display Modes
Old 05-13-2010, 07:55 PM
Posts: n/a
Lightbulb OSMI, Inventory Risk, and Industry Standards

I have a question and some comments that I would really appreciate some insight on - from any industry standard perspective. Specifically related to the Manufacturing Industry.

Inventory Management. In Manufacturing, when a product line changes or is revised in some way affecting inventory, the object of an inventory management group is to manage to zero or as close to zero - all inventory risk in terms of Obsolete and Slow Moving Inventory

From a Sarbanes Oxley perspective - I have seen the standard at a 1% to 2% of total inventory as acceptable for an audit.

What is realistic? What should Finance/Accounting be using for an Accrual and Reserve baseline?

What is acceptable? Is it simply up to a financial controller or operations leadership team or supply chain leadership team to decided? It is definitely subjective based on a supplier's lead-time and PO Terms, but shouldn't dictate the end result.

Obviously the goal is ZERO dollars obsolete, but in reality - it isn't realistic, so what would we agree on is acceptable?

If there is $10,000M in inventory, 1% would be $100K. If there is $50K in inventory, this would equate to $500.

Insight appreciated.

Matt, CPIM
Reply With Quote

inventory management, manufacturing, obsolete, osmi, slow moving

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump

All times are GMT. The time now is 02:24 PM.

Powered by vBulletin® Version 3.7.3
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.