by: Jake Halverson, Business Development

Growing Companies Need Better Inventory Control Methods

On a daily basis I speak with small, growing companies who are managing their manufacturing with spreadsheets. Increasing their lot control and inventory management is always one of the main issues they face with the manual systems they are currently using. These companies typically have someone going through their warehouse with a clipboard; keeping track of the information by hand is far from ideal for them because they have outgrown this method of “inventory management.”

Without using a real-time ERP system for inventory management and lot control, how can a company ever know what really needs to be produced, or how much of a specific product is on-hand at any given time? Data entry errors or duplicate data entry are also issues that these companies all seem to be facing,  and they face a lot of difficulty tracking their batches back to the source because they are not running software that is visible throughout their business.

 Manufacturing companies often waste countless hours each week with their manual systems. Time and resources are essentially lost along with expiring or nearly expired products. Lot tracking issues also lead to many FDA recall issues because the paper trail can be a tedious way to try and find where the problematic batch or batches may have originated – especially when they only have hours to show proof that the specific lot has been quarantined. The only real way to have accurate inventory management is to correctly implement and use a real-time, industry specific ERP solution.

By:  Chuck Theisen

Little “mrp”, MRP II (e.g. Big “MRP”), ERP, Supply Chain Management, as well as associated approaches such as JIT, TOC, Lean Manufacturing, and others all, in one way or another, address the common operations issue of efficiently managing materials. Management of inventory has been, and continues to be, a major business driver in implementing integrated business systems such as ERP and Supply Chain Management.

How do we better manage our inventories?  The basic tenet in improving inventory management processes, and therefore directly impacting materials decisions, is increased visibility of our inventory position.  Increased visibility of our inventory position is driven by timeliness and accuracy in all inventory transactions.  Lack of timeliness in inventory transactions is typically a reflection of “lag” time in those transactions.  Lag time is defined as the elapsed time between the physical activity (e.g. move, consumption, etc.) of the inventory and when the business system transaction reflecting that activity updates the database.    Lack of accuracy is usually a result of missing inventory information (e.g. item numbers, unit of measure, lot numbers, location ID’s etc.), lack of training for personnel, or personnel misunderstanding of management’s priority for accuracy in the transaction process. 

Lag time issues can be addressed by streamlining the transaction process, using tools such as bar code, RFID, or similar systems, and ensuring the transaction is processed at the point of the physical activity.  Accuracy issues can be addressed by proper training, and ensuring all required information and tools are available and accessible to the people doing the transaction. 

Remember, ultimately we must have accuracy at whatever level of granularity applies to my environment (e.g. item, lot, warehouse, location).  Any misrepresented granular count record can directly affect planning and consequently effect purchasing and manufacturing. This can cause us to have too much of some items and not enough of the needed items.  Also material management costs will be higher, based upon the need for extra counts, inventory moves and handling, etc.  To minimize these costs, and improve customer service, the organization needs accurate, timely inventory information. 

by: Rebecca Kempenich 

Are you interested in improving operational efficiencies while reducing cost and increasing customer satisfaction? We are and we are talking about it. Welcome to the ProcessPro Software Blog. We launched this blog to provide the process manufacturing community a resource to turn to find industry-related information, especially in the following areas: 

• Industry Best Practices in:
  ·     inventory management
  ·     customer fulfillment
  ·     distribution
  ·     materials management
  ·     transportation
  ·     warehousing
  ·     supply chain management
  ·     purchasing
  ·     planning & scheduling

• ERP Software Selection
• Software Technology & Architecture
• Implementing ERP
• FDA Compliance
• ProcessPro ERP Software FAQ

Weekly postings from our blog authors and industry experts will provide many ideas, opinions and discussion on how to improve your manufacturing business across the entire enterprise. Join the discussion. Tell us about the topics you are interested in. Post a comment below.