Sufficient Stock at Lower Cost

Reducing the Cost of Carrying ‘Safety Stocks'

Sufficient Stock at Lower Cost

Keeping stock of bulk materials is a costly undertaking, but a necessity to ensure continuously ongoing production. Accurate level measurement can improve inventory reporting and reduce safety stocks of bulk solids, helping companies meet financial targets, reduce costs and increase sales.
(ed. wgeisler - 27/6/2017)
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Why Volume is better than Level

In a solids application, the undulating and varying surface makes measuring the level in a vessel as a whole not a useful concept. While the level at one location in the vessel may be, for example 50%, directly underneath the filling point it may be 100%, so additional material cannot be added and the vessel is effectively ‘full’. Directly above the emptying point, the level may be 0%, so material cannot be removed and the same vessel is effectively seen as ‘empty’. Average level can be anywhere between 0-100%, so it is impossible to judge how much material is actually in the vessel. Instead of ‘level’ at one location, the user needs to be concerned with maximum level, minimum level and especially total volume.

New automation technologies are now available that replace traditional single point level measurements with continuous online volume measurement –and in addition offer visualisation of peaks and valleys within vessels. The introduction of 3D solids scanners make it possible to obtain accurate and reliable results even when measuring uneven or sloping surfaces under dusty conditions. Based on acoustic measurement and 3D mapping technologies they measure level by transmitting a low frequency pulse and receiving echoes from the surface. The wide beam penetrates dust and vapour to provide accurate results when used with a wide range of media. 

The accurate measurement of the overall surface of the stored contents generates a 3D visualisation of the actual allocation of product within the container for continuous display on remote computer screens. Using the silo dimensions to calculate the volume is therefore easy, enabling the immediate and accurate calculation of inventory value for end of month accounting and quarterly financial reports.

Fig. 4: Screen shot from the inventory control system

The highly accurate measurement data also significantly reduce the risks of over-filling or depleting a vessel. Increased measurement accuracy will give management the confidence to reduce safety stocks. The most immediate impact achieved when improving accuracy by moving from level to volume is the reduced cost of carrying this safety stock.

Replacing an existing level measurement device, with a 3D solids scanner, can instantly save between 8% - 13% of your on-hand inventory cost. Based on an annual inventory carrying cost of between 25% and 52% of on hand inventory, this translates into lot of money. A 3D solids scanner quickly pays for itself based on the reduction of annual carrying costs it enables (see below appication example).

Application Example: Soy Bean Silo


Carrying stock of bulk solids is expensive with most companies using 25% of inventory value for accounting purposes. Safety stocks add to this burden but they are required to compensate for inaccurate level measurement technologies. Because the surface of a solid is typically uneven, a level measurement at a single location on the surface does not provide much useful information. The most important step in successful solids ‘level’ measurement is therefore choosing to measure volume rather than level. The most immediate impact achieved when improving accuracy by moving from level to volume is the reduced cost of carrying safety stock.

3D solids scanners provide the most accurate volume calculation based on the best surface map, with wall-to-wall vessel coverage and the finest detail yielding. The return on the investment in this technology is the ability to better manage solids inventory, reduce safety stocks and minimise inventory costs and risk. Knowing the actual inventory not only reduces carrying costs, it also enables more efficient operation, helping companies meet financial targets, reduce costs and increase sales.

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