Managing inventory is a top priority for discrete manufacturers, yet the historically popular method—physical count—is both time consuming and often inaccurate. Cycle count, that is, using statistics to forecast inventory for material requirements planning, has alleviated over-reliance on physical materials management, but it does not account for certain factors that could impact availability like shelf life, obsolescence, or consigned component materials. This imprecision often has a costly ripple effect, from product overage/shortage to pricing and shipping miscues, poor customer service, and unproductive employees.
Implementing an ERP system and leveraging its unique features provides discrete manufacturers with a host of unique insights, data, and analytics that allow for seamless, automatic, and highly dependable inventory control and cost management, including:
Flagging perishable or obsolete inventory that might otherwise remain on the shelf. Expired materials not removed from inventory could impede production, not to mention cost you money and valuable storage space.
Tracking consigned component materials so company-owned inventory is prioritized for use, and unused consigned parts are returned in a timely manner to avoid incurring unnecessary expense.
Capturing real time inventory levels to alleviate lag time between pulling an order and subtracting materials from inventory. Plus, an ERP system will automatically track inventory status to provide an up-to-the-minute snapshot of what’s happening with all—or any subset of—inventory within your facility.
Forecasting demand through automated, multi-level inventory analysis that simplifies prediction and makes it more accurate than relying on actual orders received.
Optimizing just-in-time production by preventing the stocking and subsequent picking of parts needed for immediate use. ERP systems could also manage slotting best practices so parts frequently used for production jobs are stored near each other.
Overseeing suppliers by drilling down into raw materials, delivery, cost histories, and general service. These insights provide leverage during price negotiations, and can also inform your choices about which suppliers to use or possibly replace.
The granularity of an ERP system efficiently aligns inventory with need, making it a no-guesswork solution for improving management practices and results. Reach out to a Wipfli expert today for a free assessment on how an ERP system can make a difference in your operation’s efficiencies and bottom line.