Costly Rework from Inventory Discrepancies

$1,000-$3,500 per batch; MRO distributors' customers expect exact specs = rejection + rework + lost customer trust = churn risk • $1,000-$3,500 per bin error; MRO customers may switch suppliers if errors repeat; annual impact $50K-$150K • $1,000-$3,500 per picking error; MRO customers have alternative suppliers = churn risk; annual impact $50K-$150K for medium shop

Batch label in shop-floor bin; operator visually identifies batch by color/shape as production continues; updated manually in Excel log (lagged by 1-2 hours) • Colored bin labels (red/blue/green for different specs); operator memory of color-code; verbal updates via shop floor announcements; updated production board (whiteboard, often outdated) • Coordinator creates manual picking list and cross-checks against inventory spreadsheet (often stale); leaves Post-it notes on bins; communicates order status via email (multiple threads, hard to track)