Industrial Inventory Management: Here are the Dos and Don’ts
In industrial operations, effective inventory management can help you to get the perfect balance needed for smooth operations. It helps to reduce the problem of excess production and holding idle stock. But how do you achieve this? Here are the dos and don’ts.
Do’s of industrial Inventory Management
- Progressively monitor your industrial inventory: A good inventory management system should start with articulate tracking of what you have. This means that installing a good method of knowing the quantities of a product that you have, their location, and when they were received. At the back of your mind, you need to know the rate of products being released into the market.
- Progressively measure your system performance: Measuring the performance of your inventory is another crucial activity for effective inventory management. The goal is establishing how long the inventory is held before getting sold, supplier lead time, and turnover. At this point, it is important to look at inventory management in line with the production capacity of your plant.
- Align the inventory management with other industrial operations: One thing that you need to appreciate about industrial inventory management is that it cannot be looked at in isolation. Instead, you should look at the inventory management in line with customer demands, production needs, and sales forecasts. For example, if you are dealing with seasonal products, periods leading to the high season should be characterized by high production.
Don’t of Industrial Inventory Management
As you work extra hard to facilitate the smooth flow of inventory, it is prudent to also understand and avoid things that can compromise its efficiency. Here are some of the things to avoid:
- Hiring the wrong staff in the inventory management unit: Like other areas of industrial production, your inventory management will get compromised of you hire the wrong or poorly quality staff.
- Failing to factor the supply chain of the raw materials: While the focus of your inventory management should largely be directed at the products held in your system, failing to factor your source of raw materials is a great mistake. If you are dealing with construction, motor vehicle manufacture & repairs, or precious metal, it is important to work with reliable metal dealers. The best option should be working with a mining firm that can guarantee a regular supply of raw materials for sustained inventory.
- Operating without automation: If your inventory management is relying on manual processes such as Excel to track the movement of stock, the process is likely to waste time and feature serious errors. Instead, you should go for an automated inventory management system that allows staff in varying departments to track products in different locations.
No matter which niche your manufacturing unit is operating in, progressive growth and sustainable profits are only possible if the inventory is managed well. To achieve this sustainability, make sure to use the above dos and don’ts.