Manufacturing inventory management software has come a long way from the days of stand-alone systems and bulky specialized equipment. Today’s specialized inventory management software does more than scan and input data into a manufacturer’s ERP system.
These seven tips can help you use your inventory software for better inventory control. Inventory represents such a huge chunk of a company’s assets that it must be handled with the same care as cash on hand. Safeguard it, track it, and manage it like the valuable asset it is with these tips.
7 Tips for Better Manufacturing Inventory Management
- Track all product information
Inventory management software enables you to capture a great deal of information. Utilize as many information fields as possible to track and capture all product information. Information such as SKUs, barcode data, country of origin, manufacturer, lot and part number, and similar information may be vital if parts or materials are recalled or if you need to match specific lot numbers.
- Perform regular inventory audits
Just as your company may perform financial audits by reviewing the accounts with a CPA or an external auditor, it is vital to conduct periodic inventory audits of raw materials and finished goods. Rolling or ongoing audits, rather than annual or quarterly audits, are easier with modern manufacturing inventory management software and barcode scanners. Ongoing audits can help you prevent over-ordering items and spot potential shrinkage issues quickly.
- Prioritize the 20% (80/20 rule)
The 80/20 rule is so well-known by now that it’s become a cliché, but it still holds true: focus 80% of your efforts on the 20% that sell the best. Manufacturing inventory software can help you identify the 20% best sellers and make sure the items are in an easily accessible spot in the warehouse. This will shorten the picking time and improve warehouse efficiency.
- Establish a consistent receiving process
One area of inventory management that’s often neglected is the receiving process. Bottlenecks in receiving can lead to incorrectly reporting items out of stock and order delays. Create and establish consistent receiving processes. Assign specific team members to handle receiving and make it a rule that within hours of delivery items must be scanned into inventory and placed in the appropriate shelves or bins.
- Perform manual reorders
Many vendors provide automatic reordering service as a convenience to their customers (and, let’s face it, to keep their revenue stream constant.) Unfortunately, that can lead to overstocking some items. Although manually reordering products may seem inefficient, it can save money by avoiding overstocks.
- Use the right inventory software
All inventory software is not created equal. Dedicated manufacturing inventory management software is created for the needs of the manufacturing industry. Scanco for Sage 100, for example, offers multiple features manufacturers love such as easy barcode scanning that can reduce human error.
- Train staff to use the inventory software
Software isn’t much good if no one will use it. Fortunately, modern manufacturing inventory software is very user-friendly, but your team still needs training on how to use it properly. Establish written inventory management procedures, including procedures for receiving, pick/pack/ship, adding items back into inventory after a return, and when and how to scan items in the inventory.
Automated Inventory Management Software Improves Speed, Reduces Mistakes
Using the old-fashioned pen and paper method of inventory counts isn’t just outdated. It’s unproductive and leads to mistakes. By automating your inventory management with the right software, you can improve productivity and reduce mistakes.
Emerald TC provides software and consulting for manufacturing companies. We can help you choose the right accounting software, ERP system, payroll, or other software for your needs. Contact us or call 678-456-6919 for more information.