Inventory management is a critical function of most modern day Manufacturing Execution Systems. At its most basic level, an inventory management system (IMS) should allow a manufacturer with managing inventory across their entire supply chain. Considering the scale and complexity of today’s supply chains, this is a critical yet challenging task for most companies. IMS solutions are used by all departments and levels in an organization, for everything from working capital management and avoiding stock-outs and over-stocks, to recall management and planning service and repair operations.
An IMS should provide manufacturers with accurate and real-time knowledge of their inventory as it moves through their supply chain, and traceability of what parts were attached to a given product. In this blog post, we’ll discuss six key features to look for when selecting an IMS.
An IMS should allow you to know what parts you have in stock, where they’re located, and in what quantities. It’s a basic but critical function of any IMS, as organizations expect to be able to track, trace, and control inventory throughout their supply chain in real-time.
Any tool you choose for managing inventory should also help you allocate parts for production. A beneficial solution for your operation will give you the ability to sort and group parts for kitting from available inventory so that your team is always making the best use of its time and advancing projects.
As valuable as inventory data is on its own, it’s even more valuable when integrated with other processes. Auto-populating inventory management with enterprise resource planning (ERP), production management, as-built bills of materials (aBOMs), and accounting and finance applications allows people and processes outside the warehouse to make informed decisions on inventory data.
Inconsistencies and inaccuracies in inventory data typically boil down to a common source: human error. Whether it’s your “fat fingered” shift manager manually updating part quantities in your IMS or an operator attempting to sort and count bins of similar looking parts, manual counting and data entry is an inherently error prone process.
However, there are many solutions on the market that perform these tasks more accurately and efficiently than humans. Data capture technologies such as barcode scanners, Radio Frequency Identification (RFID) tags, and machine vision are able to automatically capture, control, and communicate this information to your IMS, leading to better data and happier workers. Whatever data collection technology you choose, your IMS should give you the flexibility to collect data in the best way for your operation.
A modern IMS should also help businesses make the best use of the data they collect. Either with built-in features or available integrations, the solution should give users the ability to leverage data for accurate forecasting, alerting managers when inventory falls outside of acceptable parameters, and tracking key performance indicators (KPIs) to support smart, data-based decisions about production, design, labor, and purchasing.
In addition to the features of your IMS, it’s also important to consider how you can access your solution. In the past, manufacturers purchased licenses and installed software onto on-site servers. Cloud-based solutions, however, provide additional benefits, including any time, anywhere access to data, vendor-managed patches and updates, and an easier path to data backups.
In the COVID-19 era, cloud solutions also provide the advantage of ensuring that people working from home have continued access to the information and insights they need.
Manufacturers recognize that properly managing inventory can give their businesses a competitive edge through leaner operations, greater profitability, and enhanced responsiveness and customer service. With a clear ROI, competitive businesses are upgrading their solutions to have those advantages. It’s time to evaluate your operations’ effectiveness at managing inventory and how improving your processes can impact your business and your market position.