Five questions about any critical material, answered in minutes from a system you trust, show how wide your Gap is. Try them on one product.
The short answer: Every manufacturer should be able to answer five questions about any critical material: what do we have, where is it, who is using it, is it where Syspro thinks it is, and what is it costing us. These are the Big Five of Operational Truth. If any answer takes more than a few minutes, that delay is your Gap: what your ERP believes versus what is happening on the floor.
Most manufacturers do not have a data problem. They have an answer problem.
There is data in the ERP, in spreadsheets, on scanners and in someone’s notebook, and a surprising amount of critical information still lives in someone’s head. When something changes (a customer order accelerates, a shipment arrives short, a machine goes down, material cannot be found, production consumes more than planned), management needs an answer, usually before the morning production meeting is over.
The five questions below sound almost absurdly simple. Try answering them accurately, right now, for your most important product.
Why the Gap is bigger than most teams think
The distance between system records and physical reality is not a rare failure, it is the normal state of most operations unless something actively closes it.
- Most records are wrong somewhere. A study in Management Science examined nearly 370,000 inventory records at 37 stores of one retailer and found 65% did not match what was physically there (DeHoratius and Raman, 2008). Follow up work on the same retailer found the inaccuracy reduced profits by more than 10% (Chicago Booth Review). Retail stores are simpler environments than most plants where manufacturing adds work in progress, consumption, yield and quality holds.
- Stoppages are expensive and frequent. Siemens estimates unplanned downtime costs the world’s 500 largest companies about $1.4 trillion a year, roughly 11% of revenue, and that an hour of stoppage in automotive costs $2.3 million (Siemens, True Cost of Downtime 2024). The average large plant loses about 27 hours a month to unplanned downtime (AEMT summary of the Siemens report). Missing or misplaced material is one of the quietest causes.
- Spreadsheets fill the trust vacuum. In BARC’s Planning Survey 14, which covered more than 400 companies in Germany, Austria and Switzerland, 83% of respondents who planned only in Excel reported problems in the planning process, and 31% of those surveyed said Excel gave them data of insufficient quality (BARC Planning Survey 14). When people stop trusting the system, they build a shadow one.
That is the Gap. One small Gap rarely matters. Hundreds of them, compounding every shift, do.
The Big Five at a glance
| # | Question | Decision level | A trustworthy answer looks like | The usual failure |
| 1 | What do we have? | Operational | Usable quantity, net of commitments, holds and damage | The ERP on hand number taken at face value |
| 2 | Where is it? | Execution | A specific location, updated when the material moved | “It’s here somewhere” |
| 3 | Who is using it? | Demand | Days of Operating Runway versus replenishment lead time | A raw unit count with no demand context |
| 4 | Is it where Syspro thinks it is? | Control | System and floor agree, and exceptions are visible | Discrepancies found at stock take |
| 5 | What is it costing us? | Executive | The dollar value of searching, buffering, expediting and scrap | Costs that only show up in month end variance |
Running through all five is one more dimension: time. What you have, where it is and who needs it next, all have to be answered for right now, along with how long before the difference costs you money.
1. What do we actually have?
What you can use right now is a different number from what the system says you have.
Your ERP might say you have 10,000 units. Of those, a portion may be committed to another order, waiting on quality inspection, consumed but not yet recorded, damaged, or physically present and impossible to find. A production plan built on theoretical inventory is a theoretical production plan.
From the floor: At LANCEWOOD, one of South Africa’s largest cheese and dairy producers, updating the production plan once took three to five days. TransLution connected live operational information directly into planning, and the update cycle fell to roughly three hours. Planners could finally work from figures they trusted.
At Skillcraft Agencies, staff had little confidence in their system data. After implementing TransLution with Syspro, stock accuracy rose from an average of 68% to 97%.
Ask this tomorrow: For one critical item, how many units are physically present, unallocated, and released by quality?
2. Where is it?
Location changes availability, and availability changes the decision.
Material can be beside the line, in another warehouse, at another plant, in quality inspection, on a truck or still at the supplier, and each of those is a different answer. The worst answer is the one where nobody knows, in that wonderfully precise manufacturing location known as “we know it’s here somewhere.”
Walk the receiving dock at the start of a shift and you can find a pallet the system shows as received and in stock, still shrink-wrapped where the forklift left it, while the line supervisor phones the warehouse to ask whether it has arrived.
A pallet in a curing warehouse is not available to a line across town. When material moves physically, the digital record has to move with it, at the moment it moves.
From the floor: At Corinthian Furniture, TransLution improved inventory accuracy and uses RFID to track work in progress across a complex manufacturing environment. At the end of the line, the system validates that every required component of an assembly is present before it ships. That is a very different answer from “the system says we shipped it.” It is “we know what physically happened.”
Ask this tomorrow: Can a supervisor find the exact location of a critical material without leaving their desk or making a call?
3. Who is using it?
Inventory means very little without demand, and the useful measure is how much time your inventory buys you.
Take 10,000 units of a critical component. If production consumes 500 a week, that may be plenty. If three large customer orders are competing for the same 10,000 units and consumption just doubled, it may not be.
What matters is which jobs depend on the material, which lines are consuming it, which customers depend on those jobs, how fast it is being used and what happens if the next replenishment is late.
That is Operating Runway, and it is simple to calculate:
Operating Runway (days) = usable inventory ÷ average daily consumption
Runway shortfall (days) = replenishment lead time minus Operating Runway
If you have ten days of usable material and the next shipment is fourteen days out, you do not have ten comfortable days. You have a four day problem.
The sooner you see it, the more choices you have: expedite the shipment, find another source, resequence production, transfer stock from another site or reset a customer commitment. Nobody predicts every disruption; the aim is to see the constraint while you still have options.
Ask this tomorrow: For your top ten materials, which ones have less runway than lead time?
4. Is it where Syspro thought it would be?
This may be the most important question of the five. Your ERP holds the plan. Your factory holds reality. The distance between them is the Gap.
Manufacturing happens in the physical world. A pallet moves, someone consumes more material than expected, yield comes in below standard, a receipt is delayed, material fails inspection, or someone writes a transaction on paper intending to key it in later.
Each of those events opens a small Gap. Once the physical factory and its digital record drift apart, every downstream decision gets less reliable:
- Purchasing orders material you may already have.
- Planning schedules work around material you may not have.
- Warehouse teams spend shifts searching.
- Customer service commits to dates that are no longer realistic.
- Finance sees the consequence a month later.
This is why TransLution integrates directly with Syspro. TransLution makes the ERP more valuable by capturing what happens on the floor, as it happens, with barcode and RFID scanning at the point of work. The smaller the Gap, the more confidently everyone can use the information already in the business.
Ask this tomorrow: When did you last discover a Syspro versus floor discrepancy, and how did you find it?
5. What is it costing you?
This is where the first four questions become a management issue. Some of the largest costs in a factory hide in the spaces between transactions.
Manufacturers negotiate hard on visible costs such as material price, freight rates and labor rates. The costs that hide between transactions include:
- Time spent searching for material
- Buffer stock that exists only because nobody trusts the inventory number
- Expedited freight
- Labor lost waiting
- Margin lost to scrap and rework
- Purchases of material you already own
- Capacity that exists on paper but cannot be used
- The cost of a missed shipment once the customer relationship is counted
From the floor: After implementing TransLution, A&A Electrical reduced warehouse costs by as much as £200,000 a year. Skillcraft went from picking 900 sales order lines a day to an average of 2,200, and halved the time it takes to get an order to a customer. That is Operational Truth turned into economic value.
Ask this tomorrow: Which one of the costs above would your CFO be most surprised to see quantified?
From visibility to control
More visibility is only useful if you can still change the outcome. Seeing a problem after you can no longer change it is just a better explanation of what went wrong.
Predictability = Visibility + Control
Visibility means understanding what is actually happening. Control means you still have choices. With both, the conversation in the morning meeting changes:
| Instead of | It becomes |
| “We ran out.” | “We have eight days before this becomes a constraint.” |
| “We can’t find the material.” | “It’s in quality inspection at Plant 2.” |
| “Why did margin fall?” | “This product is using 14% more labor and 8% more material than standard.” |
| “The ERP was wrong.” | “Here is exactly where the floor stopped matching the plan.” |
Each of those is a decision management can act on.
Take the five question test (and score yourself)
Pick one product that matters, and not an easy one: a high volume item, an important customer order, or something whose failure would get leadership’s attention. Then answer each of the Big Five and score how you got the answer:
- 2 points: answered in under five minutes from a live system you trust
- 1 point: answered the same day, after calls, spreadsheets or a walk through the warehouse
- 0 points: could not answer with confidence
Your score out of 10:
- 9 or 10: You have Operational Truth. Protect it as you grow.
- 6 to 8: The Gap is real and probably widening. Find the question that cost you points.
- 5 or below: Decisions are being made on yesterday’s facts. Start with question 4.
Don’t accept “I think.” Don’t accept “let me check.” Don’t accept an answer that needs three phone calls. The time it takes to get a trustworthy answer is part of your Gap.
The test of operational information is whether you know the answer while you can still change the outcome. That is Operational Truth, and it is where predictability begins.
Frequently asked questions
Operational Truth is an accurate, current answer to five questions about any material: what you have, where it is, who is using it, whether it matches your ERP, and what it costs. It means decisions are based on what is physically happening on the floor, not on what the system last recorded.
The Gap is the difference between what your ERP (such as Syspro) believes and what actually happened on the factory floor. It grows every time a physical event, like a move, a consumption, a scrap or a delayed receipt, is recorded late, recorded wrong or not recorded at all.
Operating Runway is the number of days your usable inventory will last at current consumption. Divide usable inventory by average daily consumption. If the result is shorter than the replenishment lead time, the difference is your runway shortfall, and that is how many days of problem you need to solve now.
Usually because physical events are captured late or manually: paper based issues, batch keying at end of shift, unrecorded moves, and consumption that differs from the bill of materials. Capturing each transaction at the point of work with a scanner, synced to Syspro in real time, closes most of that distance.
No. TransLution integrates directly with Syspro and feeds it accurate, real time transactions from the warehouse and production floor, so Syspro reflects reality and everyone can trust what it says.
High enough that nobody keeps a side spreadsheet. As a reference point, Skillcraft moved from 68% to 97% stock accuracy with TransLution and set a next target of 99.8%, with cycle counting designed to eliminate the annual stock take.
Run the five question test on one critical product this week. The question you score lowest on tells you where your Gap is widest.
See how wide your Gap really is
How many of the five could you answer for your most important product before this morning’s meeting ends? The most expensive question in manufacturing may be the one you answered too late.
Take the TransLution Five Question Audit. Run it against one product, one line or one critical material, and find out how quickly your organization can establish Operational Truth.
Your floor. Your facts. Right now.
Sources
- DeHoratius, N. and Raman, A. (2008). Inventory Record Inaccuracy: An Empirical Analysis. Management Science 54(4).
- Chicago Booth Review. First Measure, Then Manage.
- Siemens (2024). The True Cost of Downtime 2024.
- AEMT (2024). The True Cost of Downtime 2024: A Comprehensive Analysis.
- BARC and Internationaler Controller Verein. The Planning Survey 14 results.
- TransLution case studies: LANCEWOOD, Skillcraft Agencies, Corinthian Furniture, A&A Electrical.
