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Business + Management: Marty Mcghie

Q&A: Inventory IQ

Managing your resources to accomodate both efficiency and diversity can be a challenge.



Digital printing and industry experts tackle your top questions, challenges, concerns, and frustrations as 2015 comes to a close:

Q: When you look at the typical inventory on the floor at a graphics manufacturer, are you seeing a trend toward companies stocking more specialized materials for specialized applications, or towards consolidating inventory to materials that cover many applications but carry a small premium over “one-use” films?

– Nicholas Lowry, president, Brand Ink, St. Paul, Minnesota

A: As you can imagine, I am not allowed inside too many shops to look around. At bluemedia, we have definitely seen our inventory grow. We stock more and more materials in an effort to be able to provide more options at a faster turnaround time than most. It does have a cost to stock that many flavors, for sure, but it also has an upside that is greater.

– Jared Smith, president,

A: This question raises several more: First, what are proven ways to reduce inventory while still serving your customers’ diverse needs? Second, how many dollars in inventory do you have compared to monthly sales, as a percentage? Finally, what are the best practices in dealing with dead inventory?


Firehouse runs between 105 and 115 percent of inventory to sales because we buy large quantities at lower prices rather than buying from distributors with their mark-up. This means we get around 12 inventory turns per year. This does not measure well, however, the gradual build-up of very slow moving to dead inventory.

Here are some best practices for inventory:

Create and maintain a list of specific products – including supplier, cost, and product numbers – that will be used as stock/house materials for specific print applications. This list will change as new suppliers and costs change, but nothing outside this list can be purchased or used without management approval;
Use a lean manufacturing Kanban card system for ordering and inventory maintenance levels;
Do monthly inventory counts, or cycle counts if products are barcoded, every month without fail;
On a quarterly basis, identify slow moving or non-moving inventory and sell it immediately – even though you must absorb this sunk cost;
Compare your inventory dollars to your sales dollars, monthly, to understand if inventory turns;
• And learn to say “no” to customers who ask for jobs printed on “non-house” materials that will result in the printer having unpaid-for and/or unused stock.

– Terry Corman, CEO, Firehouse

[Questions and responses have been edited for brevity and clarity. Views shared represent those of independent experts and readers.]

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