The abuse of 'inventory management' and how it's holding us back

Greg Lenox, special to

A cloud of confusion hangs over inventory management and its related terminology. Conventional asset management tools fall well short of delivering the functionality required to actually manage the entire asset management lifecycle. Inventory management is one of the key methodologies needed to provide this missing functionality.

Best Processes
with Greg Lenox

It takes more than discovery and cataloging to manage inventory

Wouldn't it be great if your asset management solution would help you control how technology components are received, managed, replenished, moved, repaired, salvaged, and retired? Regrettably, this isn't likely to happen anytime soon. The reason? Simply put, the so-called inventory solutions being touted by asset management vendors don't include the management methodology, processes and practices that are so critical to success. Instead, they limit

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inventory management to a discovery process for finding and cataloging deployed assets.

For example, a great product like LANDesk Software's LANDesk Suite will discover and catalog the assets out on a network. You'll find this type of discovery capability within most asset management products available today. But what's missing is the extremely valuable processes and practices for moving, adding to, changing the configuration of, rolling out of, salvaging, and disposing of assets. Meanwhile, each asset management vendor adds to the confusion by mislabeling its own version of discovering and cataloging assets as "inventory management."

A lost opportunity of Titanic proportions

Just seeing what's out on the network is to only see the tip of the inventory iceberg. Too much remains hidden from view. Vital, correlated information is absent about the voice, network and data items that have been procured or are being procured, are on a shelf or in a closet somewhere, out in the field but uninstalled, in for repair, return or salvage. The tragedy of navigating blindly is the value you miss out on.

If you knew what you had and where it was, your operational processes could be interlinked, integrated and correlated with data to assure that the right parts were available and in the right hands at the right time and place to get the job done. Financially, you could base procurement processes and budgeting on a realistic valuation of what's needed versus what's been used versus what's on the shelf. Not to mention recovering valuable software licenses and reusable hardware from the salvage operation. Plus, you could eliminate redundant stocking and delays due to out-of-stock situations, while recovering and using the repairs from the RMA (return materials authorization) process.

A better way to run the shop

The "for profit" side of the business figured all of this out long ago. We need look no further than manufacturers and distributors for examples of true inventory management as part of a supply chain management model. Their definition of what constitutes an asset is robust and end-to-end. It starts with raw materials and all the stock required to produce the finished goods. Suppliers and distributors are plugged into the process, too, with sales reports flowing back to headquarters to inform manufacturing and to adjust production schedules. This total tracking capability is what's made the JIT (just-in-time) revolution work. And driven profitability, too, by the way.

Why not IT?

It's easy to see how we could leverage the lessons of manufacturing and distribution. Imagine being able to look at a picture of the hardware and software resources and voice and data services at your disposal down to the components within a kit. You could turn guesswork and reaction into processes and planning. You'd have the power to raise end user satisfaction, and lower capital and operating expenses.

The reason it hasn't happened today is because true asset management is a complicated, multi-dimensional, ACTIVE process. As I noted earlier, conventional asset management products just don't support the processes required to do the job. I believe that once we start managing IT service delivery more like a supply chain, we'll earn the respect we deserve from the "for profit" side of the business. But that's a topic for a future column.

Greg Lenox, an expert in the processes, methods and practices of IT operations for customer support, help desk, asset management, inventory management, telecommunications management and change management, is president and CEO of Entuition Inc., a maker of operations management solutions in the infrastructure logistics marketplace. At Entuition and in previous positions, he led several major re-engineering projects. His clients included SunTrust Banks, Citibank, Target, GlaxoSmithKline, Baxter Healthcare, Nations Bank, Wachovia Bank, First Union Bank, BB&T, CCNB, CNA Insurance and others.

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