The success of product centric businesses relies on effective inventory maintenance, as shortages often result in loss of sales while overages lead to waste, additional storage costs and obsolescence.
Essentials for Maintaining Inventory
Products undergo many steps and stages as they make their way through your business to your customer. Whether you manufacture, distribute, or resell products, a lot can happen between the time you receive goods through delivery to the end user and it’s important to record that information to optimize your profits and performance.
- Tracking – Properly maintaining inventory begins with tracking. If you have no idea if product received matches your purchase orders, your inventory costs and counts will be inaccurate. Tracking is necessary at every stage; a product in production can incur new costs as it moves through various stages and there may be waste along the way that remains a complete mystery without the information collected at each stage.
- Determining Reorder Points – Calculating the right amount of product to have on hand to meet demand allows you to set minimum quantity amounts for your products. If you set your SOS Inventory account to trigger a purchase order when those minimums are reached, you will always order goods at the right time to prevent shortages. The timing of your reorder must also consider the amount to keep on hand while awaiting the arrival of more goods. That amount needs to cover any orders that come in while your vendor fulfills and ships the order to your door. You must consider the lead time for each item to have enough stock.
- Physical Inventory Count – A lot of things can happen from the time you receive goods until you ship them out that impact your quantities and costs. Items can be misplaced, broken, expire, stolen, or become obsolete. It’s also possible for the vendor to send the wrong quantity or miscalculate monies due. Conducting a physical inventory count at regular intervals (quarterly or monthly) allows you to reconcile your real-time amounts against your records.
- Integrate Data from All Locations – Whether you’re talking about multiple warehouses, your production floor or another department, SOS Inventory gives you the valuable capability to integrate data from every location, so every team member is working with the same set of information.
Your goal is to maintain inventory profitably. If you don’t have checks and balances in place, you won’t be able to identify the cause of losses, never mind fix them. Maintenance inventory software can assist to this end.
Maintenance Inventory Management
MRO inventory management is also commonly referred to as maintenance inventory. In this regard, we refer to the maintenance of equipment used in the production of goods. This may entail repairing a machine and having necessary tools and parts on hand to take care of these issues as they arise. The longer your staff copes with faulty equipment, the longer the delay in production, resulting in shortages and lost sales opportunities.
If you do not have the parts on hand to perform repairs, the time that piece of equipment is inoperable drives up your costs. To keep up with production, your floor managers may end up spending more on alternative equipment or rush shipping parts to minimize downtime. In fact, the lack of spare parts is the top reason for equipment downtime – and a problem that is completely avoidable with proper tracking and inventory management. Maintenance of inventory saves time in the long run.
Fortunately, SOS Inventory can solve all your inventory maintenance problems from one end of the business to the other with fully functional manufacturing and inventory features to encompass all the workflow activities your entire staff performs day in and day out.