BMW will manage its inventories centrally in the future using the inventory software Stasam from Stat Control. The company was initially using a proprietary developed program. The new solution also needed to master those estimation methods which make use of auxiliary information.
BMW used a proprietary developed software for sample inventories for 25 years. They started looking for a new piece of software when all the German sites and the spare parts supply operations throughout the Group were migrated to SAP. The auditors requested that the new solution also master those estimation methods which make use of auxiliary information. “The Group defined the so-called difference estimation method as a minimum requirement,” stated Jörg Ökonomou, Stat Control’s Managing Director.
Difference estimation is one of four approved methods (free mean-value estimation, difference estimation, ratio estimation and regression estimation) that can be used to determine both the relative sampling errors and the total value deviation. Sample inventories performed according to these methods are permitted by law (according to Paragraph 241 of the German Commercial Code). After all, roughly 20% of the stock items are sufficient to represent 60 to 95% of the stock value. However, auditors only recognise sample inventories if these values fall within certain limits – so in this regard, it doesn’t matter which of the four estimated value methods is used to calculate the result. This specification can lead to very different results: “An inventory that was successful according to the difference estimation calculation method may, therefore, fail under the rules of the mean-value estimation,” explained Mr Ökonomou. The informational value of the mean-value method thus falls short of many companies’ and auditors’ expectations. Those methods that make use of auxiliary information work far more efficiently in this regard. Indeed, ratio estimation and regression estimation both offer specific advantages.
The following rule can be derived for using such methods in practice: The more accurate the method used to determine the relative sampling error and the total value deviation, the sooner the inventory performed will meet auditors’ expectations. After inviting various suppliers to submit tenders and assessing the same, BMW opted for the inventory systems Stasam and Staseq from Stat Control GmbH. These systems offer all the permissible statistical methods for inventories.