Manufacturing industries deal with many complex processes and maintaining an efficient inventory control is the most mandatory thing to focus on. Inventory is a major part of investment that a company could make. Hence most of the money in the form of stock lying in the store should add value to the business process. The stock level should not be too much or too less in quantity as both scenarios are considered undesirable.
To say it in simple terms, Inventory management is a strategy that allows you to maintain the right stock materials, at the right location and at the right time resulting in excellent production.
Now let us discuss 7 important strategies that will help you achieve an efficient inventory control in the manufacturing industry.
Maintain minimum inventory levels :
First you should set up a minimum inventory level for each of the items and products in the store. Setting a minimum level will ensure there is no wastage of materials. When the predetermined level is reached you will know it’s time to reorder. Also it is crucial to set an accurate level for each product depending upon their previous sales, how frequently it is utilized and how long it can be preserved. All these can be achieved using an ERP software which alerts you with notifications when the critical level is reached. It also ensures to keep track the locations of each and every product being stored.
Use First In First Out method :
First In First Out (FIFO) is an important principle that should be followed for an efficient storage of products. This is nothing but ensuring your oldest products get sold first and recent products at last. It is a healthy strategy that helps you to prevent products being damaged when stored for a long time hence resulting in unsaleable products. Of Course you don’t want to sell any defective products that will lead to a bad impression with the customers. Also the store must be organized in a way to store recent products at last racks hence the sales will happen from the first one. An ERP software can provide you with clear visibility and ready access to easily find the items from the stores.
Conduct regular inspections :
Regular inventory inspections are the best way to prevent any issues about to happen in future. The data recorded in the inventory software regarding your stocks in the storage should match the data got from physical count. Inspection can be done once in a year or even monthly depending upon your requirements. Also a report on how well and how frequent a product is getting sold will be helpful in forecasting the product manufacturing and setting a minimum level for each item in the store.
Manage good relationships with the suppliers :
The key to a healthy supply chain management is to have a good relationship with your suppliers. To ensure last minute hassles are never gonna happen in your production process, you should maintain good communication with suppliers in delivering the materials on time as well as for more numbers when the production increases. Always remember that lack of raw materials is a big problem for manufacturing as it could affect the entire operation. Hence a good supplier can be a great support system to ensure timely delivery and sustain customers.
Integrate mobile technologies :
Mobile technologies have evolved enough to serve everyone with the tool access through applications from anywhere and any locations. This helps employees to get real time information about the shipment and supply chain updates. Hence any critical situation can be handled immediately without any delay, providing efficiency at all levels and earning higher customer satisfaction.
Demand forecasting :
In order to avoid excess procurement, over stock or less stock you need to find out the amount of inventory that should be maintained on a regular basis. This number can be found by conducting a demand forecasting. The demand forecasting is done using several factors like market trends, previous years sales, expenditures, upcoming promotion and growth and customer demands.
Automate your inventory management system :
Manual inventory by human counting things is really bad for any business as you lose accuracy in the values. Making manual entries each time consumes more time and at times, if forgotten leads to issues later. Hence using an efficient ERP system that can automate the data entries, warn you for critical errors will be helpful for a healthy inventory management.
From the above strategies it is evident that ERP software tools are greatly beneficial to the manufacturing industries in every aspect and especially maintaining a controlled inventory level and efficient inventory control. To know more about Freedom ERP, feel free to contact us for an online demo with ERP consultants.