Inventory management isn’t the most exciting thing in the world, but it’s an essential foundation for your business. Without it, you can’t achieve operational efficiency and productivity. Most manufacturers carry out some inventory processes regularly. The problem is most of them are doing it all wrong.
Here are six inventory management mistakes you should avoid and how to avoid them:
1. Carrying out inventory checks just once per month
The process of carrying out inventory checks is simple: Check stock, make notes, reorder products for the next month, etc. However, most manufacturers carry out inventory checks only once a month (some do it even less frequently).
Instead, manufacturers should carry out inventory checks in real-time. This way, they can gauge supply and demand on the shop floor and optimize production processes. The solution is simpler than it sounds.
A good manufacturing execution system (MES) automates many of the processes associated with inventory management — stock control, reordering products, you name it. As a result, you can manage inventories in real-time without any hassles.
2. Not measuring performance
Research shows that 20 percent of electronics manufacturers don’t have a proper supply chain measurement system. If you don’t measure supply chain performance, you’re simply doing your company a disservice. You won’t be able to solve problems on the shop floor or forecast future manufacturing trends.
Production management software optimizes inventories and provides you with actionable metrics that track shop floor activity. Prodsmart’s Global Overall Equipment Effectiveness indicator, for example, gives you shop floor updates in real-time, so you always know what’s going on in your organization. You can also access aggregated reports about various elements of your manufacturing operations, including workers, products, raw materials, and machines.
3. Ignoring inventory analytics
The latest software provides manufacturers with deep insights into their inventory processes to improve service, remove bottlenecks in their production processes, and save money. However, many manufacturers still don’t use the latest analytics to track performance.
A cloud-based MES generates real-time insights into inventory management — demand forecasts, fill rates, order performance, and much more — so manufacturers like you can make smarter decisions in a quicker timeframe.
4. Not tracking inventory properly
If you don’t track inventory properly, you’re setting yourself up for failure. You’ll never know when your products expire, become damaged, or go out of stock. Perhaps unsurprisingly, research suggests that the majority of inventories are wrong. In the retail sector, for example, inventories are accurate just 63 percent of the time.
Real-time inventory management software increases predictive maintenance in your organization, so you can make smarter decisions and improve quality management. Programs like Prodsmart let you reduce out-of-stock items, increase sales, and source intermediate products with a click of a mouse or swipe of a finger.
5. Lack of communication with suppliers
When you don’t communicate with suppliers, there can be a breakdown in your manufacturing processes, which can negatively impact your organization. A lack of raw materials, the wrong machine parts, the incorrect stock quantities — all of these events can occur due to poor supplier communication.
Smart manufacturing software like Prodsmart collects information about processes such as manufacturing output, product waste, and low stock levels. You can share this data with the people who provide you with materials and parts and improve communication.
6. Allowing inventory errors to pile up
Inventory errors can result in customers not receiving their products on time or lacking raw materials for production. This can have a detrimental impact on your business as a whole. Research shows that 77 percent of businesses lose sales due to poor inventory management.
If you still use manual techniques for inventory management, it’s time to digitize your methods for greater accuracy. An MES will reduce human error during inventory management and make it easier to forecast demand in your organization.
Achieve better inventory management with Prodsmart
It’s time to incorporate real-time supply chain management software into your organization. Ready to communicate with suppliers more effectively, track your inventory correctly, and access the latest metrics? Transform the way you run your business with Prodsmart!