Inventory Management: Improving Business Performance for Manufacturers
Working in a manufacturing business, or any business for that matter, brings with it a number of operational challenges, assessing existing inefficiencies and deciding which strategy is best for your business and it’s growth.
Enter some lovely pieces of manufacturing inventory management software, that can help you save the day and simplify operations. However, while these cloud-based operations can contribute massively to an efficient and streamlined business, there are a few basic and key strategies that can improve your performance.
One of the main goals for any manufacturer is the ability to make the order-to-delivery process as efficient and as fast as possible. The quicker your company can produce goods to match demand, and the more efficient and cost-effective this process is, the more profitable your business will be.
In a perfect world, forecasting would allow your business to always accurately predict what products will be in demand and when. Unfortunately, crystal balls don’t actually work (sorry to let you down guys), and so the success and profitability of a company can often come down to how flexible it is able to be, and how well you can adjust its processes to meet demand and change.
Efficient Inventory Control
As essential a task as it is, inventory control is sometimes one of the more difficult tasks you, as a manufacturer, are likely to do. Your ability to keep inventory costs low, to order parts as and when needed and to access accurate information all contribute to a healthy and more efficient operation. As we’ve already noted, crystal balls can’t help you here (unless staring into a blank crystal helps you reduce stress, then by all means it can), so this means analysing the data you have to hand to make an informed decision about what’s needed.
Material Requirements Planning (MRP)
Before we delve into some of the individual methods, it’s worth mentioning the solutions that Material Requirements Planning offers. MRP software have been designed to provide an overall management platform for product planning, product scheduling and inventory control and are a great solution for manufacturing businesses.
Lean Inventory Practises
The idea behind lean-inventory practises is not new but has been further expanded and perfected in recent years. As a general rule, all manufacturers seek to achieve at least some of the goals of lean practises. Methods like Toyota’s Just-In-Time are commonly used among all types of manufacturing businesses and when implemented well, can achieve fantastic results.
Essentially, the ultimate aim of any lean-inventory method is to reduce inventory levels to the bare minimum required for operations and to eliminate as much operational waste as possible. In regards to inventory management, this can include everything from reducing the amount of storage space needed in the warehouse to utilising multi-skilled workers to reduce labour costs.
The use of effective inventory management systems are essential for the application of lean-inventory practises as the system is what drives and monitors the method. There are now a wide selection of automated software platforms designed to act as a central portal for such processes, making the application of lean-inventory methods that much more accessible and achievable.
‘Pull’ Over ‘Push’
Customers have always been important to businesses, but recently businesses are realising that it’s not just marketing strategies that should be influenced by customers. More and more businesses are realising the benefit of a ‘pull’ approach to manufacturing. This is ultimately when the manufacturing process is led by customer demand rather than by production.
The more traditional ‘push’ approach often results in overstocking and tends to be too dependent on long-term forecasting (there’s that crystal ball again!). Like other lean-inventory practises, the ability to utilise a ‘pull’ approach is dependent on the use of effective inventory management systems.
Cycle Time Reduction & Effective Scheduling
The benefits of cycle time reduction and effective scheduling are massive when effectively and consistently achieved. With the ultimate goal of getting the product to the customer faster, and the reduction of the cost of production, they pay huge dividends for businesses that get them right. Customers are happier with quicker delivery, the business is happier with reduced costs; everyone wins!
Look for inventory management platforms that utilise production scheduling tools and provide real-time access to operational processes and data. The more control and data you have over every process, the better you can maximise your methods.
Supply Chain Management
Perhaps one of the biggest effects you can have on the manufacturing process is to streamline and optimise supply chains. Getting this right provides a positive ripple effect to all areas of the manufacturing process, so it’s worth putting some focus and time into it. Think of it as the intelligent interlinking of every part of your production, from the supply of raw materials right through to delivery of finished goods.
The use of inventory management software is essential for effectively controlling your supply chain processes. And with control comes the ability to make adjustments where and when needed. Done well, even complex supply chains can be streamlined and optimised.
Cost-efficiency = Freed-up Capital
It might sound obvious, but inefficient inventory management often results in a high inventory investment, tying up capital that is needed elsewhere. Everything that your business does to create and maintain efficiency across all areas of operations will be reflected in the performance metrics. The obvious positive side-effect of operational efficiency and streamlining is increased profitability, and who doesn’t want that?
Getting The Right Fit for Your Business
There are now a wide range of inventory management platforms available for manufacturing businesses. It’s a good idea to identify what features and functions you need and then find a product or suite that offers these. With huge progress being made in cloud and mobile technologies, the future looks bright for some all-in-one manufacturing solutions.
Of course, if you use Unleashed, you can also integrate your account with neatly.io, which will make it even easier to manage your inventory!