Why inventory management matters

Welcome to your account dashboard

Submitted by b.joshi on Thu, 05/13/2021 - 13:32

Cash is king in any business, including manufacturing. As we all know, inventory management is vital in lean manufacturing.


So minimising ‘working capital’ – the cash tied up in physical assets – should be high on the agenda for any manufacturer seeking to optimise efficiency and cashflow.

Central to doing that is ensuring best practice when it comes to managing shop-floor inventory: the components, tools and safety products which are vital to uninterrupted production.

 

Shopfloor Safety Gear and Inventory Management at SupplyPoint

 

Of course, it goes without saying that any company should ensure that these stocks will not run out, with the risk of a missed order deadline, unhappy customers and associated reputational damage.


But at the other end of the scale, ensuring sufficient supplies are available should not mean having so many on-site that cashflow is negatively impacted, or that products perish or become obsolete before they are used. This is especially the case for companies seeking to embrace a lean manufacturing ethos.

 

Traditional inventory management systems typically focus around a physical stores area with items either available on request from a dedicated stores colleague, or on a ‘help yourself’ basis

Warehouse employee working in their shift at SupplyPoint

    Steel front lockers SupplyPpoint

     

Unfortunately, both of these have their drawbacks. The ‘walk & wait’ time associated with an individual having to leave their workstation to withdraw an item from the stores can be significant, and highly detrimental to overall productivity – especially if they stop to chat to several colleagues en route. And what happens if the stores are not open, either because it’s an evening shift or the store’s manager is on their break?


The ‘help yourself’ system is no better. It allows for an individual to take far more of an item than they actually need, to save them having to go back again in the near future. This could mean that the next person who needs an item may find it’s unavailable, and this then potentially have a  significant impact on production if the previous person hasn’t told anyone  they have taken the last one of a particular item.


That in turn can elicit a frantic rush to source replacements, often paying a premium for rapid delivery to keep production going – all while substantial quantities of the required items may already be on-site as ‘squirrel stock’, cosseted away at individual workstations.


The problem is even worse if items are not put in the right place in the stores area. Tales of companies unearthing vast stocks of now obsolete components, years after they were purchased, simply because the inventory was not managed properly. The traditional system doesn’t allow of accountability or traceability. Waste consumption for consumables is a common problem, while cleaning products and other items such as batteries, hand tools, gloves and so on, have been known to disappear for personal home use


Let's take a look on ways to tackle these issues.

Towards best practices in inventory management

The problems of sub-optimal practice in this area are very clear, so any manufacturer with an eye on the bottom line should be seeking to take clear control of it.


A ‘best practice’ way of working will ideally tell a company not just what they have in stock, but – for higher value items or those which might easily find their way – who is taking items and when, and will also enable supplies to be automatically replenished when they start to run out i.e. inventory management.


Ideally, it should also have the capability to limit consumption of any one item by a particular individual, or even prevent them from accessing it altogether if it something they don’t actually need for their role. It will also allow the right products to be accessible at any time they are needed, irrespective of whether a physical stores area is open.
The solution is vending – commonplace in many consumer environments but now becoming equally common in factories. Specialised equipment like lockers, rotary equipment and so on is linked to a local computer or the Cloud to provide companies with complete real time visibility of stock levels and other vital management information surrounding access and usage.


Employees must either enter a code or use an identity card to access what they need – with all systems configurable to each item and employee. And, of course, the equipment can be located on the shopfloor, physically close to where it is needed, meaning 24/7 accessibility and vastly reduced walk & wait time.

SupplyPoint’s inventory management solution uniquely combines bespoke hardware designed and manufactured in-house – configurable to each customer’s specific requirements in terms of locker and compartment sizes and quantities – with best-in-class, industry-specific software. This delivers, in real time, clear, accessible data and reports enabling companies of any size to have complete visibility of their stockholding and past usage. Indeed, our WebSync cloud-based platform enables companies to manage SupplyPoint inventory management solutions from anywhere in the world, via a user-friendly online interface - viewing and editing data as well as creating and running reports and  automated tasks for that equipment.


Moreover, we have established partnerships with the leading suppliers of all relevant components and consumables, enabling us to deliver a complete inventory supply and management solution.

Getting on top of inventory management isn’t just a good idea– it is vital to business continuity and profitability, and proven vending technology provides the solution, irrespective of the size of your business and the sector in which it operates.

 

For more information contact us below:

Tools and Safety Equipment at SupplyPoint