Manufacturers must keep track of their resources, machinery, raw materials, and products, in order to achieve operational excellence. That’s also called effective manufacturing inventory management. Let’s dig into this in detail.
What is Inventory?
From raw materials to finished goods, people, machinery, or other resources used in the production process are known as manufacturing inventory management.
As a small business owner, you look through different glasses every day: marketing, accounting, designing, production management, and shipping, are all areas you deal with on a daily basis. This means you face numerous challenges like keeping up-to-date with operations, meeting customers’ demand, making sure all staff has access to and is trained to use your MRP software, production planning and scheduling, finding the right suppliers, or mitigating waste and reducing costs
Strategic inventory management can help with most of these challenges, but it’s certainly not a piece of cake. Here are 3 practices small manufacturers can benefit from to optimize their inventory, mitigate waste and improve efficiency.
1. Reorder points
Setting a reorder point allows you to have enough time to create a new order before your inventory reaches this threshold. It tells you when you need more materials and when to produce more products or sub–assemblies. Setting a reorder point ensures you develop an optimized schedule without delays.
2. Safety stock
Safety stock is the amount of inventory you should have in the warehouse in order to avoid supply shortage. Having a safety stock is an important inventory management tip, because it ensures your customers receive their orders on time, because your materials and products are available at all times.
3. Smart software
No business owner wants to spend time trying to keep up with inventory. Instead, you should invest your time in growing your business and perfecting your product to keep your customers happy. Smart manufacturing software helps you do exactly that.
Do your research, study the available software solutions on the market, and make trial accounts to get a feel of what they have to offer. It is important to choose the right software, based on your company’s specific objectives and available resources.
Look into features like real–time master planning, shop floor control, traceability, production planning, purchase order management, and accurate costing. Seamless integrations with your business essentials like e–commerce platforms, accounting system, and shipping apps, are also mandatory.
Smart inventory management techniques help you stay ahead of your competitors by streamlining operations, keeping your products and materials organized, and improving accuracy. Simply put, effective inventory management strategies help you take your businesses to the next level.