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Inventory Management System Features for Manufacturers

Posted: June 05, 2019 by Ly Phan

Inventory Management System Features for Manufacturers

Inventory control is critical for manufacturers. Accuracy, costs, and time are all factors when it comes to managing stock and equipment. Utilizing the full breadth of inventory management system features can turn loss-making businesses into thriving, profitable enterprises. The advance of technology and cloud-based solutions in this era of industry 4.0 is having a dramatic effect on the tried and tested traditional methods.

For manufacturers, the advent of industry 4.0 means the internet of things (IoT) will have a huge role in the way teams work. There will be increased automation, machines will become increasingly able to communicate with each other and self-monitor. The bedrock of these advances is data, and technology is starting to develop its capacity to fully harness the huge volume of data we generate.

While the principles of solid inventory management remain constant, it’s essential for businesses to embrace technology in order to get ahead. Using a cloud-based system can enable manufacturers, large and small, to get ahead of their competitors.

What Is Inventory Management in Manufacturing?

Materials are the biggest expense for manufacturers across all industries.

There’s a variety of definitions that you can find online, but for manufacturers, inventory management is as followed:

“Inventory management covers the processes that impact on the storing, tracking, managing, and ordering or items from the supplier to the end customer. The moment the raw materials land in your warehouse or factory, it’s subject to your inventory management system until it leaves your area of responsibility.”

The purpose of having a well-organized, efficient inventory management system is that it gives your business the ability to deal with common manufacturing issues, such as:

 

  1. Supply and demand: This is an age-old issue, where manufacturers need to predict demand ahead of time to be ready to match it. Inventory management can help forecast trends and ensure you have the resources in place.
  2. Handling excess stock: No matter how well organized your business is, it’s likely you will end up with excess stock. Having a system can enable you to handle those items more efficiently.
  3. Staff training: By using standard operating procedures (SOPs) and training manuals, you would be able to slot staff into the system with minimal interruption.
  4. Integration with other systems: Manufacturing businesses are effectively a collection of processes, of which inventory is a vital component. From assembly to accounting, it’s essential any inventory management software can seamlessly integrate with different systems and stakeholders.

 

As the chart above demonstrates, materials are the single biggest expense for manufacturers, so it pays to focus on inventory. The objective is to minimize wastage, maximize efficiency, and improve accuracy.

Inventory Management System Features

The challenge of managing inventory is a familiar one for manufacturers, but there is a solution.

For manufacturers, using inventory management software can bring a new level of automation to their operations. It streamlines the different processes, whether it’s receiving and put away, stock control, or order fulfillment, a cloud-based solution can be the way forward.

Working with reputable companies, you can have customized software, designed to fit your own business needs. However, all good inventory management systems for manufacturers should come with some core features:

 

  1. Automated reordering: You have the ability to set levels at which point the software will automatically reorder stock. For example, if you want to make sure you have a constant supply of metal sheets, you can tell the system to order more when the number in stock dips below 10.
  2. Track and monitor inventory: Using a barcode system, manufacturers would have the ability to not only monitor stock levels but also location. Additionally, the software can track different parts at every stage of the manufacturing process.  Whether it’s on the desktop or tablet, workers will be able to locate necessary items quickly wherever they are.
  3. Order fulfillment: One of the drawbacks of traditional, paper-based systems is the room for human error. Inventory management software dramatically reduces this risk and can lead to accuracy rates of 99%+. This is essential for manufacturers who deal directly with customers and wholesalers.
  4. Manage unique orders: From time to time, manufacturers may get specific orders with unique measurements and materials. Cloud-based software can manage those orders easily, with minimal fuss.
  5. Works across multiple locations: One of the key benefits of a cloud-based solution is you can use one platform to manage inventory across multiple locations. For instance, if your company’s assembly chain is spread across different locations, you can still control inventory from a single dashboard - with all the information in front of you.
  6. Logistics support: The shipping of products and items is one area where companies can make significant savings. With inventory control, businesses will be able to organize their stock for efficient logistics operations. DiCentral clients use Smartturn’s inventory management software to successfully collaborate with third-party logistics (3PL) businesses. Using the software, the manufacturer was able to track items in real-time, across different locations. This increased accuracy and reduced the likelihood of stock being lost or orders misplaced - generating several thousand dollars in savings.
  7. Online access: Being in the cloud and online means users can access the system remotely, wherever they are in the world. This can prove particularly useful for businesses that operate across different geographical locations.
  8. Real-time visibility: This is a key selling point. The top inventory management systems offer real-time visibility, showing users all the information they need in a few clicks. The transparency is essential for manufacturers as they seek to streamline operations and processes.

 

These are just some of the inventory management features manufacturers can enjoy using cloud-based solutions. The overriding theme is flexibility and ease of communication, even between machines. The power of data is driving the next stage of automation with the internet of things becoming mainstream and accessible to manufacturers.

 

To take advantage of the industry 4.0 era, it pays to proactively utilize cloud-based inventory management solutions. Each of the features mentioned above can help businesses in the following areas:

  1. Forecast Supply and Demand: By being able to track inventory in real-time, you can use the management platform to analyze trends and patterns of demand. In doing so, you’ll be ready to plan ahead and get the supply and resources in place so you will not fall short. The same principle can be applied to certain peak periods of the year, which can vary from industry to industry.
  2. Regular Audits: A critical element of any inventory control is regular audits of your stock. While counts can be tedious and disruptive, a cloud-based solution can make this process far less time-consuming. Using barcode technology, you can carry out routine spot checks and cycle counts to alleviate the need to do regular physical counts.
  3. Contingencies: Like any responsible business, it pays to plan for unexpected events like a rush of demand or a loss of supply. Inventory management software can help you prepare your business with contingency plans through analyzing potential bottlenecks and weaknesses in your processes.

 

Conclusion

For manufacturers, running efficient and smooth operations is essential. Sound inventory control is a critical element to successfully achieving such a goal. Adopting a cloud-based solution and embracing all its features would lead to a more automated business with greater accuracy that’s not possible with a paper-based system.

Having a leaner, streamlined business will lead to savings and increased profit. In fact, one client reported saving up to $40,000 a month - equating to $480,000 a year. These kinds of numbers can make a significant difference to any company and generate new opportunities. Take a proactive approach to unlock the full potential of inventory management system features.

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