Last week we had a question in our Community Discussion board about how many Inventory items should an institution have, specifically, mechanical inventory items. She suspected they may be carrying too many items, but wanted a benchmark to back up those suspicions.
So this week we had the Data Dudes do a deep dive on Inventory, focusing on Mechanical inventory items. We started exploring the data and asking some of our Campus Champions their thoughts and received great feedback. They reminded us many clients use InventoryDirect in unique ways that could boost their Mechanical Items artificially- for example, institutions that track one time purchases in InventoryDirect. They also reminded us that size and purpose of the Facilities are important to consider as well. At the end of the day, we realize that every institution has unique processes and goals, but we also agreed, an industry benchmark would be valuable.
We examined around 850 InventoryDirect accounts and focused Mechanical inventory, then put the institutions into three categories based on student enrollment size (one for small, medium, and large), and then removed outliers from the data set.
The result is the above chart. The second column refers to any Mechanical Inventory item that has not been marked "Discontinued". The third column averages how many of those items did not have an Issue transaction in the last 12 months. The fourth column shows the percent of Active Inventory that hasn't been issued in the last 12 months (column three divided by column two). What we found was eye opening. The fact that for each group over half of all Mechanical inventory hasn't been used in the last 12 months, surprised most of us.
This new benchmarks provide insight, and potentially spotlights opportunities for improvement. But along with that are new questions. How much of your overall inventory is "dead" or no longer being used, but taking up space in the warehouse? How much is acceptable? And more importantly, how can this impact the bottom line?
Those are the questions are what lead to continuous improvement and we'd love to hear your thoughts.
Do you know where your institution stands in comparison to this benchmark? If you own InventoryDirect, you can quickly run an Issue Summary report for the last 12 months to see which Mechanical items have been issued- and compare that to the overall count of your Mechanical Inventory items (I used an Advanced Search to get that data).
Our Data Dudes will continue to expand on this topic of on-hand inventory, and I could even see this becoming a KPI on the Dude Data Dashboard in the near future.
We appreciate clients sharing posting their thoughts and asking these types of questions. It's what aides us in our mission of helping educational operations teams succeed. Please continue to share your thoughts by posting Discussion topics, sharing Ideas, and commenting on our Blogs.