Inventory Turnover is the number of times your inventory cycles or turns over in a year. Inventory turnover can help an organization understand how efficiently their inventory is supporting sales. The inventory turnover number implies how often inventory was bought and sold throughout the year. Low inventory turnover numbers often hint at overstocking, obsolescence or unstable processes. A high inventory turnover can also be dangerous if it is depleting reserves to quickly.
How to calculate:
Inventory turnover is calculated by dividing the cost of goods sold by the average amount of inventory.
Red tags are a visual tool that is used during the sorting phase of a 5S initiative. In the sorting phase of 5S, items are either gotten rid of, kept or placed in a red tag auction area. The red tag is used for items that are either gotten rid of or placed in auction. Please note we suggest if a clear decision has been made to "get rid" of the item, just get rid of it.
General process of red tagging items:
Best Practices are a technique used in benchmarking. The technique measures similar items, activities or services and is used as a measurement or performance standard. Defining best practices is often used in continuous improvement to set new standards or improve on current practices.
Six sigma and many other forms of project management use "tollgates" to check the progress of projects in relation to their objectives. When an assigned individual approves that the team has successfully completed one stage of the project, the team then can "pass" on to the next stage of the project or initiative. If the team does not successfully complete a stage they can not "pass" on to the next phase.
In six sigma the DMAIC methodology is used. Team members may establish tollgates between the Define, Measure, Analyze, Improve and Control phases of the methodology. At each of these points the team must receive approval before moving on.
What benefits do you see in having and using tollgates within a project?
**Place answers in the comments tab**
DMADV is the methodology used when designing new processes that did not exist prior to their design. DMADV can also be used on processes that have attempted improvement with another methodology but the improvement failed to meet the required objectives or critical to quality measures.
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