When labor and raw material costs are rising, the only rational way manufacturers can cut costs is by improving efficiency. As an operation grows bigger, managing all kinds of inventory using paper documents is not just cumbersome, but also unsafe and prone to errors. For every unit and type of inventory, there can be more than a dozen details that need to be recorded, tracked, shared and managed.
When a manufacturing unit reaches a certain tipping point, it is simply not feasible to rely on manual inventory management. Too many manufacturers suffer by adopting an ad hoc approach when trying to automate or computerize inventory management. Implementing a comprehensive inventory management solution can take time and effort at the start, but the investment is totally worth it when you consider the long-term benefits.
Here’s ten common manufacturing inventory management headaches that vanish when you get the right solution working.
1. Physical Inventory Management Simplified
One of the toughest task for manufactures is managing a large pile of inventory for mixed-mode manufacturing. An inventory management solution empowers your staff to automatically collect data of inventory through RFID and barcode scanners. For large manufacturing units, wireless RFID can also help automate the task to a finer level.
2. Quality Management
One of most important parts of inventory management is quality management. The sheer quantity of inventory, in combination with the different types of materials and the different quality tests they entail, make the task time consuming. With an inventory management software, you can update the data on different kinds of products, enter test schedules, set test procedures, plus outline rules for test planning and approval at different levels.
3. Streamlined Work Orders
When you have dozens of work orders rolling in every day, in form of emails, paper documents, or mere scraps of paper, it is tough to get an overview of the entire cycle at a glance. An inventory solution ensures that all orders are visible in a digital format, thus helping you prioritize and schedule smartly. You can also choose or build a system that automatically schedules and follows up on orders, using a predetermined set of parameters and methods.
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4. Firm Inventory Control & Compliance with Advanced Tracking
Combining the solution with RFID, barcode or wireless instruments makes it very easy to track various types of inventories at different levels. Not only does this reduce the possibility of theft or other unexplained loss, but it also make the entire inventory easily visible at different stages of production. Needless to say, this feature is very useful for manufacturers who need to comply with WEEE, HACCP, RoHS or other regulations.
5. Production Planning
Shop-floor dynamics like resources cost, resource availability and fluctuating demand are factors that majorly impact product line planning. In order to plan production on the basis of line (instead of items), you need data on backlogs, margins, etc. An inventory management software puts all the data at your fingertips, empowering you to create better-informed production plans.
6. Forecast Requirements
An inventory system gets data from various points of the process and extrapolates data to make accurate forecasts. This means that you have a clearer overview of the demand for finished goods, which helps you forecast need for raw materials better. Reliable forecast helps your streamline the entire raw material procurement and production process, leading to time and cost savings.
7. Master Scheduling Made Easy
If your manufacturing unit supplies goods to a wide range of clientele, you deal with regular clients with clear demands, wholesalers with fluctuating demands and customers with seasonal requirements. Even when you can forecast the demands reasonably well, it is difficult for your staff to manage details of dozens of orders. A proper solution automates most of the tasks, helps you maintain optimum inventory and simplifies production planning.
8. Resource planning
One of the toughest part of managing manufacturing inventory is setting up perfect coordination between human resources, finance and materials. By integrating your ERP or other core software with an inventory management solution, you can rationalize and speed up information flow across the organization. This, in turn, helps ensure the availability of necessary resources and enables you to authenticate the production plan before you create a detailed Manufacturing Resource Planning.
9. Easier Material Requirements Planning
Materials planning, when implemented well, ensures that you never run out of raw materials. At the same time, it helps keep the lowest possible levels of materials and products – thereby reducing overheads. By integrating the solution with other software, you can automate most part of the process, including automated purchasing and production messages.
10. Better Capacity Requirement Planning
With the right solution, you never have to worry about not being able to fulfil production expectations. Once the manufacturing order is generated, the system matches planned requirements with capacity and works out the feasibility. Also, the solution makes it easy and fast to generate reports and capacity requirements plans quickly.
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