When it comes to asset tracking, how does your company analyze manufacturing cycle times? For instance, do you focus solely on the cycle times to manufacture a finished assembly? Or, do you also analyze the individual times for each subassembly portion of the total assembly? Granted, these are loaded questions. However, they point to the issue of why some manufacturers focus too much of their analysis on the cycle time for a finished good, without properly analyzing the individual cycle times for separate work operations. This is ultimately why a number of enterprises make sure to break down their analysis on cycle times to include tracking work order completion for all individual operations. This allows them to isolate areas of concern, while also mitigating issues pertaining to downtime and lost time in specific work stations. The question now becomes: Does your company track work order completion for each subassembly portion of the finished good?

One of the biggest supply chain issues for today’s enterprises is how they match their inventory counts to their customers’ demand. This often becomes a situation where a company either has too much inventory, and not enough sales opportunities, or too many sales opportunities, and not enough inventory. One issue pertains to a company’s inventory carrying charges, while the other pertains to a company’s lost sales. Both are direct costs of inventory management and they are the reason why companies continually struggle to find just the right amount of inventory to meet the needs of their market. Ultimately, the solution it comes down to tracking your company’s historical sales volumes versus your inventory cycle counts of finished goods.

As a manufacturer, how does your enterprise reduce the high costs of encountering multiple material shortages? Better yet, why are you encountering so many shortages and is there something your inventory management team can do to eliminate them as a going concern? Well, in a number of cases, material shortages come with the territory. Some are caused by market-wide material shortages, the kinds that affect all companies and all competitors. However, there are other instances where material shortages are caused by human errors, ones that are exacerbated by your company’s manual inventory tracking processes. Yes, your company may be impeding its own progress simply because of how it manages these shortages. It’s the reason why you need to upgrade to an asset tracking software, one that can track inventory in real-time.

Companies that excel in warehouse management typically have an inventory tracking software that keeps tabs on all inventory counts in real-time. These companies rely upon their software in order to track a number of inventory metrics including, but not exclusive to, order picking, cycle counts, pick and place transactions and most importantly, their inventory counts on finished goods. While tracking inventory in real-time is definitely a plus, it’s often the little things that make a big difference. It’s these little things that not only help a company in inventory management, but that help them reduce costs, eliminate waste and improve efficiency. So, what are these little things? More importantly, what can your company expect once it decides to upgrade its paper processes to an inventory control software?

What does your company consider an essential warehouse & asset management key performance indicator (KPI)? For instance, do you track your accuracy in order picking? Do you track inventory cycle counts and material allocation? Perhaps you do all of these things and more. However, do you currently have an inventory management software that allows you to easily track these KPI, or are you forced to do all this tracking and analysis via manual processes like excel spreadsheets and time sheets? Granted, it’s a lot to consider. Regardless, it points to the importance of having access to a real-time asset management tracking software, one that allows you to track your warehouse efficiencies and identify any issues pertaining to how orders are picked, how material is allocated and how easily inventory cycle counts are reconciled.

Sales Drives Inventory & Procurement!

While every company understands that sales drives inventory, very few actually take the time to improve the communication between their sales and procurement teams. Instead, it’s not uncommon for these two business functions to work against one another simply because they've each been given conflicting goals and objectives. For instance, the sales team is tasked with generating sales, increasing gross profit and growing market share. To be successful means they must always have inventory available. Success means avoiding inventory stock outs. The purchasing team is tasked with reducing warehouse management costs. Their success is measured by how well they minimize inventory counts on raw materials, consumables and finished goods. Sales needs inventory to make sales, while procurement needs to minimize inventory counts to reduce warehouse management costs. It’s an obvious problem and one that is only exacerbated by companies who rely upon manual inventory management processes.

A value chain analysis is a simple tool whereby companies define specific internal processes, ones that allow them to deliver high value products and services to their market and their customer base. Invariably, companies tend to focus on accentuating one specific portion of their value chain. For example, some companies tout their engineering and design excellence. Others focus on their manufacturing expertise. Others on their product innovation, and yet others focus on their vast distribution network and or their sales and customer service strengths. However, there is one portion of the value chain that all companies have, and it just happens to be the one portion they often overlook when describing the value they bring to their customers. What is it you ask? Well, simply put, everything begins and ends with your company’s supply chain and your accuracy in inventory management. It’s the first and most important part of your value chain, and it dictates how successful your company is in bringing products to market.

Is it fair to assume that if your company focused on reducing inventory transaction errors that you would improve your overall service to customers? It most certainly would. In fact, while reducing inventory error rates helps to reduce costs, and improve gross profit on sales, its ultimate purpose is to improve your company’s operations and service competencies. Success means you’ll improve your inventory management practices and upgrade how you sell and service your customers. It’s a pursuit that is far easier to manage when you barcode inventory and have an asset tracking software.

Today’s low interest rates aren’t helping companies reduce their financing costs. Unfortunately, there are other factors at play, factors that all but eliminate any benefit accrued from today’s low financing rates. So, why is it that companies are seeing their costs of capital increase in an economy where the cost to borrow money is at an all-time low? There are two reasons for this. First, customer demand has decreased substantially, which means companies are carrying inventory for longer periods. Second, every company is delaying payments on invoices in order to improve their own cash position. Both issues are serious concerns for today’s enterprises because they increase the costs of financing inventory and receivables. In addition, they point to the importance of having the right inventory management metrics to help reduce these costs. After all, if you have to carry inventory for longer periods because of low demand, then it’s more likely that your costs of obsolescence, damage and pilferage will increase as a result.

Most enterprises rationalize their manual inventory management processes. For these enterprises, the cost of upgrading to asset management software is simply too much to justify. As such, they go day-to-day making the best of a bad situation. They do their very best to reduce the impacts of manual processing and data entry errors. For the most part, they see these errors as internal to their operations and not external to their customer base. Somewhere along the way they decide to continue on as usual in the hopes that their minor errors won’t impact how they service their customers. However, manual processes do have a cost and they eventually impact customer relationships. Unfortunately, for some enterprises, those costs aren’t realized until it costs them customers, market share and revenue. So, how can your company’s manual processes end up costing you your most important customers?