Eliminating Supply Chain Confusion and Inventory Wastes

Improving production and assembly line operations, while effectively managing the supply chain and distribution dynamics of a discrete manufacturing business, requires cooperation in every level of company resources. Fortunately, innovative inventory and distribution management software has the ability to streamline procedures and effectively reduce overall operational expenses.

However, no two manufacturing operations are exactly alike, therefore applying lean principles to improve efficiency, market segment position, and profitability involves a customization process. The soft costs incurred through ordering and stocking inventory can be substantial, and when combined with obsolete parts, dead stock, or a miscommunication produces excess materials, wastes occur and profits vanish.

Furthermore, the best distribution management and inventory solutions involve the implementation of a comprehensive IT plan with the ability to eliminate confusion, miscues, and blind spots in the supply chain.

Soft Costs

Manufacturers incur soft costs on every piece of inventory from the moment of delivery, and these costs progressively increase the longer the materials are present at the production facility.

For example, the specialized fasteners used to create product, or component “X” cost $0.20 each. Upon delivery, the fastener must be transferred to its appropriate stocking local. If it will not be stored near its assemblage point, it must be touched multiple times, generating unnecessary labor and operational expense, increasing its price, per piece by up to 400%.

Distribution management software combined with inventory programs such as just-in-time, can effectively eliminate most of these costs by coordinating precise shipments and scheduling PO’s to seamlessly deliver goods at the point of assembly, exactly when they are needed.

Reducing Waste

An inventory and distribution management software program that connects every aspect of the supply chain is able to orchestrate a timely delivery of goods at the production level. Resulting in less stocked inventory, which eliminates dead stock occurrences, and the chance for uncontrollable part deterioration or accidental damage, which produce material wastes.

These programs focus on providing production inventory scheduling solutions, which increases product profit margins, and disengages company funds that would otherwise be used to purchase unused inventory.

Increased Visibility

Many organizations face the tedious execution of reconciling hand counts with sales orders and PO’s. Another benefit of inventory and distribution management software programs, is that they are able to group all aspects of production in an easy to understand, all-encompassing system.

The result of this being increased inventory visibility, superior data capturing, with measurable results. Removing instances of multiple or duplicate purchase orders, consequently, saving administrative labor and reducing excess inventory.

Cutting operational expenses and increasing production efficiency is the goal of every discrete manufacturer. By implementing customized ERP software, organizations can achieve profitability aims, and establish inventory and distribution management programs that positively affect every area of operation. To learn more about SBS Group’s Discrete manufacturing solutions, contact SBS Group here or call 888.725.2555.

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Comments

  1. Excess inventory is always a big issue for many firms. There should be certain measures to curb this problem as this may lead to great amount of losses to the firm. Thanks for sharing this information

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