Manufacturers are always looking for an edge over their competitors, and that edge can be derived from a myriad of different avenues. It may come from improved quality of raw materials, higher quality control checks, less expensive manufacturing costs or any number of other process-tightening activities.
One of the best ways manufacturers can get a leg-up on the competition is with a focus on getting inventory accuracy spot-on, but for many manufacturing companies the struggle with inventory is real, so they toss it in the ‘too hard’ basket.
Here are the reasons why inventory accuracy should be top of every manufacturer’s shopping list this year.
Real time reaction time to real time issues
If you have a sound inventory management system in place, you know where your inventory is, where it’s come from and the quality of that inventory. With high levels of inventory accuracy built into your system, you have visibility of your inventory status at any given time, and that’s a lifesaver.
Having real-time visibility of your inventory status allows you to react immediately to any problems that may arise, or are about to arise. Historically, manufacturers wait for the end of the day to check and record their inventory; then react accordingly. With automated inventory accuracy systems in place, you can make key manufacturing decisions before you have a problem, saving you any waste-related and downtime-related costs down the track.
Cut down on inventory investment
Manufacturers regularly wake up in a cold sweat because they’ve had nightmares over excess inventory. The costs associated with buying more than you need runs deep and it can become a real killer. Excess inventory results in over production, increased carrying & storage costs as well as the dreaded ‘w’ word – waste.
Knowing what you have and what you need can save you a fortune. Eliminating the requirement for inventory buffers – i.e. purchasing inventory for ‘just in case’ reasons because you don’t know your work in progress inventory status – means that the capital you would spend on excess inventory can otherwise be used where your company needs it, allowing you to once again sleep easy.
Reduce the manpower hours
Labour-intensive inventory counts be gone! With an inventory management system that promotes accuracy, manufacturers can cut out the need for time-consuming, tedious and error-prone physical inventory counts by having visibility over your inventory levels at any given time.
Having control over your inventory levels means that you can take a snapshot of your inventory any time you need to, with the confidence of knowing that you can report those figures quickly, and most importantly that those figures will be accurate. When it comes to periodic inventory accounting, this is a massive benefit.
Don’t let recalls become doomsday
Product recalls are an unfortunate part of manufacturing life. No matter how well drilled your processes are, something can still get by – through no fault of your own.
But it’s how a manufacturer responds to a recall that defines whether it sinks or swim.
Knowing everything about your inventory is hugely beneficial in the event of a recall. You can establish where the bad material came from; identify which customers may have been shipped the non-compliant product; absolve yourself of liability by proving compliance to regulators and importantly – respond to the recall fast, a key requirement in many industries.
