Category: Inventory Control
- The Best Guide to an Inventory Control System
- Periodic inventory management tracks your inventory level at the end of an accounting period rather than daily. This can be done weekly, monthly, quarterly or annually.
- Perpetual inventory management: This tracks your inventory continually, allowing for automatic updates on inventory management as soon as stock is received or sold. This is usually inventory management software or a POS system. and allows you to maintain accurate and updated inventory levels.
- Barcode inventory system: These use barcoded numbers to identify and track products sold. The barcode includes useful information related to the supplier, manufacturer, product location and weight. There are two barcode types:
- Universal Product Code (UPC): This has the manufacturer and product code.
- Stock Keeping Unit (SKU): This is created by individual retailers for internal stock control.
- Radiofrequency identification (RFID) systems: This is where a tag in the stock contains all the relevant data, and a reader identifies this. Great for big warehouses and distribution centres.
- Food distribution: If you’re in a restaurant, grocery store or educational institution, then you are dealing with food on a daily basis. The difference between too much food and too little is key, which is why inventory automation is vital.
- ECommerce: If you maintain a warehouse for eCommerce activities, then investing in inventory management software is definitely worth it.
- Consumer goods: Seasonal changes related to consumer goods mean that constant inventory management is required. You don’t want to be left with too much of last season’s products.
- Electronic devices: Because of the exorbitant cost of electronic devices, inventory management control is needed to prevent overstocking and losing out on lots of money.
- Improved productivity: Your automated inventory system means you will get more done quickly, with time saved on auditing and tracking inventory, alongside a healthy cash flow.
- Minimise old inventory: Your stock will be stored by date, your software is tracking levels, and you won’t be left with unwanted stock. This reduces waste and saves you money.
- Automation: Inventory tracking software means employees can focus on more productive tasks while minimising the risk of human error.
- Real-time updates: You can access real-time stock information at any time. Click into the system on your phone or tablet for up-to-the-minute information.
- Better customer service: Product stock is automatically uploaded with zero customer delay. Efficiently managing customer demand makes for happy clients and a profitable business.
- Accurate cost tracking: Your inventory software can calculate all the total sales, taxes and other fiscal information, allowing you to monitor the cost of your inventory as well as the stock itself.
- 3 Simple Ways to Optimise Logistics Systems in Your Business
- Why and How to Use Batch Number Controls in Manufacturing
- Food and beverage
- Cleaning products
- Toiletries and cosmetics
- Construction materials
- Dates of the manufacturing process
- Bill of materials
- Details of the person verifying the process
- Health and safety information
- Maintenance and cleaning information
- Quality control test results
- Equipment and processing lines
- Supply line details
- Quantity of goods produced
- Best before date
- Weight of active ingredients
- This can be a really affordable and user-friendly process when you’re working with the right company.
- With batch number tracking automation, you’re able to improve integration, compliance and customer relations.
- This simplifies your quality control as you’re easily able to track your products across the company.
- Automation gives access to everyone in your organisation, as they can easily access, trace and verify batch numbers and warranty information.
- Through automation, you’re able to quickly troubleshoot which means tracking and removing any expired products from the shelves.
- With batch number automation there’s improved accuracy which means improved regulatory compliance and less chance of charges.
- Improved compliance means more likelihood of increased sales over time.
- With automated batch number controls, there are fewer accounting errors than with manual tracking.
- What Does Poor Inventory Control Look Like for SMEs?
- Economic order quantity (EOQ)
- Minimum order quantity (MOQ)
- Just-in-time (JIT) inventory management
- ABC analysis
- Consignment inventory
- Safety stock inventory
- Acquiring a new customer can cost five times more than retaining an existing customer
- Increasing customer retention by 5% can increase profits from 25-95%
- The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%
- Manage your stock efficiently
- Reduce out of stock situations
- Reduce obsolescence
- Reduce overstock situations
- Multiple warehouse and branch capable
- Create additional stock related reports using Omni’s powerful report writer
- What Are the Best Practices for Stock Control Optimisation?
- Inventory management is the order, managing, storing and moving of your stock.
- Inventory optimisation is more specialised, such as ordering the right products in the right quantities so as to meet your demands.
- What You Need to Know About Food and Beverage Stock Control Systems
- How ERP Can Improve Your Warehouse Management
- Stock tracking and management
- Sales and purchase order management
- Warehouse management and stock transfers
- eCommerce functionality
- Payment gateway functionality
- Integrations with other operational tools
- Intelligence reports and analytics
- Interactive, real-time management of activities and consumption
- Multi-channel order processing
- Inbound and outbound serial tracking, pick planning and consolidated picking, order pack-out, cross-docking, carton packing, RFID, and manifesting interfaces
- Better visibility
You have access to real-time data on all your current inventory which allows for demand forecasts and identifying trends. By discovering which products are popular with customers and when you can better plan for future orders.
Because of your inventory’s improved visibility and traceability, you’re able to better deal with any product recalls. You can quickly identify and remove all recalled products, thereby protecting consumers – and your business.
- Just-in-time inventory
This feature allows for stock levels to be kept low and products to move quickly through the warehouse using ‘just-in-time’ orders. This means the product doesn’t sit for ages in the warehouse, and money isn’t lost on expired or damaged goods.
- Inbound/outbound optimisation
The ERP system has planning tools that optimise how inventory is moved around the warehouse. This allows you to determine the best date and time to receive shipment based on the equipment and staff available.
- Better System Security
There is a wealth of valuable data retained on an ERP system designed for warehouse management, so it comes with enhanced security features. All employees will have access to individual user accounts when getting into the system, limiting the threat of theft and errors. In addition to the access requirements, ERP software also has user-based access levels so that not all employees have access to every part of the software, only what is necessary.
- Increased Productivity
By streamlining warehouse operations – including incredibly complex processes – the ERP system frees up employees to focus on business-driven activities rather than wasting time on administrative duties. There is a quicker turnaround and a much higher return on investment.
- Improved Staff Morale and Support
With employees not handling the mundane warehouse operations and dealing with more content customers, your employee morale will drastically improve. They feel more in control at work and a lot less stressed. And, because ERP systems are relatively standardised, they’re easy to learn and easy to use.
- Better Billing Management
Your ERP system will have billing management tools that allow you to track all financial transactions within the warehouse and generate accurate fees. You can also connect to other eCommerce platforms for extensive financial operations.
- Consistent Updates
The software is always improving, which means that your business is also continually improving! Through continuous software updates, you’re gaining access to new features that keep you ahead of the game while also reducing the need for in-house IT employees.
- Mobile Deployment
The increasing decentralisation of work and remote operations means employees will need to access warehouse management software from afar. ERP software comes with a mobile-friendly interface that can be accessed from handheld devices. This mobile deployment gives employees access to purchase orders, inventory, and raw material. And, because there are real-time updates, you’re able to access the latest information at all times.
The Best Guide to an Inventory Control System for Your Business
Monitoring inventory can start easy enough with your pen and paper or – for the more advanced – an excel spreadsheet! But, as your small business grows (and you know it will), you’re going to need a more sophisticated inventory control system. Some really top-quality software options take all the hassle out of inventory control. Here’s a simple guide to inventory control systems and which will be best for your business.
What is an inventory control system?
If you’re still questioning ‘what is an efficient inventory management system?’ and ‘what does an inventory management system do?’, we’ll clear this up from the start. An inventory control or management system is the process by which you track your goods throughout the supply chain. This means from the moment you purchase them through to the end sales. Every company has its way of managing inventory, depending on the size and nature of the business.
What is inventory control software?
There’s a technological solution for absolutely everything in this modern age, and inventory management is no different! Dedicated computer inventory management software helps you track and control inventory, with many cloud-based applications being the first choice. Inventory control software – or an automated inventory control management system – is the next step up from spreadsheets and the ideal way to futureproof your business.
This allows you to access your inventory data, any place and anytime!
What are the different types of inventory systems?
There are four different systems of inventory control. These include:
Who uses inventory control software?
Inventory control software or an inventory control information system is used by many industries, from small-scale operations to massive warehouses. Here are some of the industries that should be prioritising the implementation of inventory control software.
What features do you need to manage your inventory?
The great thing about inventory management software is that you can choose from a variety of features that make inventory control that much easier. When chatting to an inventory software supplier, you need to discuss the features available and decide which ones will work best for you – bearing in mind that you don’t want to oversubscribe and pay unnecessarily. Here’s a look at some of the features to consider.
If there’s one way to lose out on customers, it’s by not having the necessary stock level when they require it. Fortunately, inventory software can offer you an automated reordering feature that keeps your inventory levels in line. You need to set your minimum quantities for each item, and the system automatically generates a purchase order which is sent directly to your supplier. There are also reordering features that can base quantities on historical sales data.
With the rise of online shopping, many manufacturers require eCommerce integration so that all sales are streamlined to retail customers. Your eCommerce enterprise will be more successful by keeping track of all your stock and updating where necessary.
Point of sale integration
This is a really important inventory management feature as it helps automatically track when products are being scanned, checked in to an online cart and sold. You will benefit from real-time updates on your inventory which is useful for restocking and also monitoring buyer behaviour for more dedicated marketing campaigns in future.
This is where your inventory system analyses historical production and sales data so that you’re able to predict your stock management needs in the future accurately. This is hugely helpful in business planning as you can determine the right stock level required at any point.
For bigger retailers, manufacturers and warehouse operators, it’s not enough to know the number of units available but also the specifics of each unit. For clothing, you would need to know the style, colour and size so that you know what needs to be ordered and when to achieve the finished goods.
This is a great feature for tracking the movement of every inventory item into and out of storage facilities and makes warehouse management a simple process. As soon as a barcoded product enters, it’s scanned and enters the system. Barcoding is available in a number of options, including serial tracking and batch barcoding, depending on the value and type of product. Many barcodes can now be scanned using smartphones, so there’s no need to invest in specialised hardware.
RFID (radio-frequency identification)
This is a specialised inventory control feature whereby an RFID tag is affixed to products. As soon as they’re in close proximity to a reader, the product information is tracked. This is a great way to manage inventory count and streamline the process, eliminating the risk of forgetting to scan an item or misplacing it.
Product cost analysis
This inventory tracking tool monitors all your raw materials and finished products with automatic reordering of product components when they hit minimum levels. This is a great feature for the manufacturing industry as it’s able to generate a bill of materials with product and cost descriptions.
Why are inventory control systems important?
So, we’ve gone through the various features, but you might still be asking, ‘what are the benefits of inventory control software?’ Well, here’s a look!
What does the implementation process look like for inventory control software?
How is inventory control software implemented? And who is responsible for its implementation? You can work with a leading inventory control software supplier who can customise your inventory control system and assist you with implementation. You will need to get commitment from your team from the start, with any implementation process requiring on-site training and support throughout the process. No matter how great your inventory control software is, if you have a poor implementation strategy, then it’s going to cost you unnecessarily.
It’s best to start by contacting industry professionals. Omni Accounts is a leading inventory control system supplier with the right expertise to guide you in your selection and implementation.
3 Simple Ways to Optimise Logistics Systems in Your Business
Can you juggle? How many balls can you keep in the air at one time? Would you say three or four? How about five?
If your day job involves supply chain management, you might be more talented than you think.
Logistics takes coordination and you have a lot of figurative balls up in the air all at once. So, how can you improve the daily juggling act of your business?
Let’s see how your organisation can benefit from optimising your logistics systems.
How Do You Optimise Logistics?
Here are three simple ways to optimise logistics systems in your business.
Automation means that you can plan further ahead. Logistics software provides more accurate calculations which takes some of the guesswork out of future requirements. It also reduces judgement errors.
Why waste valuable time on manually doing tasks when you can get them automated instead? Smart software tools can really help you here.
It’s often a good idea to outsource work that your company can’t perform in-house. Or, at least, the busy work that doesn’t need to be done in-house. Outsourcing may seem like an unnecessary expense, but it pays in the long run.
For example, if you have an online shop, you might consider outsourcing your product packaging. This type of delegation will give you more time to spend on your business without having to learn the ins and outs of another speciality. As a result, you’ll see an increase in sales and business growth.
3. Accurate Predictions
In supply chain management, timing is everything. Timing comes into play when you’re working to get the right materials, in the right quantities to the right people.
So it’s important that you’ve gathered data to base your decisions on. Working off past records will help you predict future patterns and prepare accordingly.
Inventory control is especially important in the retail setting. For example, let’s say you run a bakery, and you sell a variety of pastries on a daily basis. You’d probably sell more during colder weather when people are craving comfort food. So, it’s necessary to understand your customer’s behaviour, what they want, and when they want it.
When your decisions are thus informed you’ll anticipate changes in your logistics requirements and you’ll be better equipped to meet demand. You’ll find your logistics process optimised, providing better customer service.
Vehicle Loading and Scheduling
When it comes to logistics, vehicle loading and scheduling is a whole story on its own. Implementing loading and scheduling software can help you in these areas:
– Managing routes and delivery times
– Coordinating your orders and deliveries better
– Running your fleet more efficiently
– Reconciling your loads and deliveries
Let’s take a closer look at how this all comes together in one useful package with Omni’s Vehicle Loading Feature.
With our logistics management software feature, it’s much easier to manage deliveries. You’re in control from the moment a sales order is generated right up until delivery is made.
Delivery management functionality does the calculations for you. So the system lets you know if the vehicle is overloaded or ready for transportation.
It’s easier to access loading sheets. This helps you see the list of customers you’re delivering to. It’s also a quick way of seeing the stock items that need to be included in the load.
Not only does our software help with distribution, but also with physical vehicle loading in that you can manage the carrying capacity of your vehicles better. It allows you to input vehicle data, such as weight, volume, and carrying capacity which makes it much easier to determine if a vehicle is overloaded.
Once all your orders have been captured as loaded for delivery, the software will generate the relevant invoices. Then, when you have the invoices, your vehicle is ready to be sent out.
Our Vehicle Loading feature simplifies every step of load management. This makes it so much easier to coordinate all the factors. The room for error is much less when one step automatically follows the next.
With our vehicle loading and scheduling solutions, you can even set up customer route profiles. So when it comes time for vehicle loading, you can pull up customer delivery details with the sales orders.
When you set up a particular routing for deliveries, you can also set a delivery sequence. This information will automatically populate onto the trip sheet.
The importance of route optimisation shouldn’t be overlooked. Your customers expect to receive their orders on time, every time. When you let them down, your reputation pays the price.
Don’t Drop the Ball
The logistics process is a fundamental part of the retail industry. This is especially true if your business has anything to do with e-commerce.
What is the cost of disruptions in your supply chain? In 2020, it was reported that 64% of American and European companies lost up to 20% of their revenue, and their brand reputation suffered too. (Source)
So it’s pretty important to make sure that your logistics strategy really works. You don’t want to lose out because of inefficiencies or disruptions. You’ll also need to recognise weak points and prepare for the unexpected as best you can.
Optimising logistics systems isn’t a quick fix and it involves many interrelated business processes. Streamlining your operations might not happen overnight, but that doesn’t mean it’s an impossible task.
Partnering with the right logistics software provider will make the juggling easier to handle. Every business can benefit from Enterprise Resource Planning (ERP) to streamline day to day operations. One of the benefits of our ERP system is that you can seamlessly integrate your logistics process.
What Does Optimisation Mean in Logistics?
Put simply, it means improving the performance of your systems. You take your business challenges and all possible factors into account and then make a plan to develop the most efficient, profitable way forward.
In logistics, you have to manage a variety of supply chain factors from start to finish. You also have to rely on analytics as this data provides critical information that you need to coordinate supply and demand.
We are acutely aware that procurement of enough raw materials at the right time is an important part of logistics. Failing this, we won’t be able to fill manufacturing and distribution requirements. We need to balance many factors so that we can reach the best value for money at the same time as meeting our customer expectations.
Here are some of the factors that make up the logistics management juggling act:
– Placing and completing orders
– Reverse logistics
– Control, forecasting and managing inventory
– Warehouse storing, packing and handling inventory
– Inbound and outbound logistics
– Vehicle scheduling, loading and transport management
– Keeping pace with suppliers
– Customising a software system and gathering important data
– Global logistics
– Vehicle loading and scheduling
Optimising logistics means better planning and execution no matter what industry you’re in.
If you want to please the crowds, your juggling act must be perfect. And it can be.
When you optimise logistics systems your business benefits. You can quickly maximise your operations and build a stellar reputation in your industry. You will experience an increase in your profits when you improve your productivity and daily operations.
It’s Omni’s goal to make sure you never drop the ball. If you’d like more information on a customised solution for your business, contact the team here.
Why and How to Use Batch Number Controls in Manufacturing
If you’re in the manufacturing industry, you know the importance of quality control and the time constraints you face when products are suddenly recalled. Batch number control software is the best way to keep on top of your inventory. However, you have to know how to use it – and which is best for you.
What is a Batch Number?
The batch number is a designation printed on the label of whatever product you manufacture so that you can keep track of each batch produced. In addition to identifying the batch produced, the number will include particulars relevant to control and manufacture.
What is Batch Tracking?
This is a simple way of tracking your batches of manufactured goods to optimise the management of your supply chain and keep on top of quality control. Using batch tracking, you can quickly identify and locate stored goods when they’re being shipped, stored in warehouses, or distributed to consumers.
Which industries use batch number tracking?
This is incredibly useful for all types of industries related to manufacturing, among them:
How Does Batch Number Tracking Work?
If you’re implementing a batch number tracking system, here are some of the steps you can follow to ensure all controls are in place.
Define the batch size: When itemising the batch, you need to ensure the products were manufactured using the same raw materials, by the same machine and team, during the same period of time.
Choose your batch format: Your batch numbers should be unique combinations of letters and numbers. It’s best to include the product’s date and initials for easy searching.
Keep track: You’ll need to log all the details of the batch in a tracking record document.
Include all batch details: Every batch needs information pertaining to the batch. This could include:
Why Use Batch Number Tracking?
You might have a general idea of why batch number tracking is useful, but here’s an in-depth look at why you should be implementing it as a manufacturer.
Using batch numbers, you’re able to quickly identify any defective raw materials which is vital for product recalls. If there is any product defect, whether the materials, parts or machinery, you can easily determine the source of the problem and rectify the situation.
When products need to be replaced or repaired, the batch number will allow you to identify the relevant information, keeping your customers satisfied.
Many countries legally require a batch tracking system which will have to be considered when deciding what to include.
Streamlined Expiring Tracking
For those in the manufacture of food products, batch number controls are an important way to ensure high-quality food production at all times. With batch number controls, the expiration date of food will need to be tracked to keep consumers safe.
Using batch control numbers prevents the emergence of counterfeited items from entering your inventory. This is particularly important if your products are susceptible to fakes, as you can pick up counterfeits quickly to protect your profit margin.
Batch control numbers are also able to provide you with useful insights into your business such as which batches are selling better than others. This way you can quickly notice trends in which items are best to stock.
What Are the Benefits of Automating Batch Number Controls?
If you’re in the manufacturing industry and are looking at implementing batch number controls, you will probably be considering an automated system. Here’s why an inventory management system such as this can be so beneficial to your business.
What Are the Features of Batch Number Tracking in Manufacturing?
Automated batch number control systems are made even easier with the latest features. When investing in a new system, you might want to consider what features are best suited to your organisation. Here’s a look at some of the options available:
Certain batch number control software comes with auto-populating instructions that guide users through the entire process.
The batch number control software can also come with log-ins and sign-offs with double authentication requirements for added security.
Certain software comes with industry-specific compliance management tools that collect information and documents required by law.
An efficient system will come with quality control features to assist in quality testing data that tracks deviations and identifies any discrepancies in inventory.
A batch number control system will be able to integrate with existing warehouse and inventory management systems, thereby updating the system with material use and allowing for real-time inventory control.
Modern batch number control systems are now available with mobile capabilities so that you can access your software from any mobile device. This means no need for hard copies and you’re able to check on your inventory wherever you are.
Certain systems come with specialised instructions and records such as master packaging and batch packaging records. This is particularly useful for manufacturing companies specialising in pharmaceuticals.
Converting Unit of Measurement
If you’re manufacturing items that use different units of measurement, you’ll require specific software that automatically converts these base units for improved accuracy.
You might need to restrict access to your batch number control software depending on what you manufacture. This will require security controls that enforce signing off on various procedures throughout the manufacturing process.
There are specialised batch number control systems in the chemical manufacturing industries that will actually integrate with your equipment. This could be scales, thermometers, or pressure sensors so that all readings are automatically calculated.
If you’re finally convinced that an automated batch number control system is the way to go, but you’re not sure what to do next, then contact Omni Accounts. They provide industry-leading software solutions specific to your industry for a seamless and efficient inventory control system.
What Does Poor Inventory Control Look Like for SMEs?
It’s been said that customer experience is the new battleground for 21st-century businesses.
Do you agree with that statement?
Great customer experience is not simply a team of smiling staff or a slick website. In most instances, it’s being able to give the customer what they want, when they want it. It’s likely that you aren’t the only company supplying a particular product or service in your area. Therefore, once you’ve gained a new customer, you don’t want to give them any reason to go elsewhere.
Poor inventory control will do exactly that.
In fact, substandard inventory management has long fingers and is one of the key reasons why small businesses fail.
How can we find the right balance within our inventory management and keep our customers coming back?
What Do You Mean by Inventory Control?
It may appear that inventory control and inventory management are similar since they both deal with the same topic, “How much stock should I order?” Despite being used interchangeably, these two terms actually refer to different aspects of inventory optimisation.
For example, inventory control is the process employed to ensure the right stock levels to meet customer demand, while maintaining optimal costing.
On the other hand, inventory management relates in a broader sense to the process of ordering, storage, use, and sales of your products, including the management of raw materials and warehousing.
Either way, the end result should allow you to hold the right amount of stock at the right time, in the safest place, and at the best price. If this sounds like one of life’s impossible juggling acts then you’re not alone. It’s like searching for the answer to “How long is a piece of string?”
However, there are certain inventory control methods that businesses have used over time, and which you may be employing right now. Many of these solve common inventory control problems.
Inventory Control Methods
You’ll appreciate that there is no one-size-fits-all approach to inventory control, and there’s no single right way of managing this moving target. Several of the more popular inventory control methods have proven useful to some.
In fact, we’ve touched on this topic in one of our previous articles around the various methods of inventory management which highlights the processes and their advantages.
What Does Poor Inventory Control Look Like?
So, we understand what inventory control is and what it entails, but how do we know if we’re getting it right? Sometimes, a (scary) list of what not to do answers the question better than a host of features and benefits.
We’re unpacking information on how to find the right balance in a constantly shifting landscape and avoid the pitfalls associated with weak systems. (Hint: Goldilocks was certainly onto something when she was searching for not too much, not too little, but that sweet spot in the middle.)
Too Little Inventory
Whether you operate in an online environment or you work from a physical location, stock control matters. Too little inventory results in those dreaded “out of stock” notices on shelves or on the exact item that your once-loyal customer was searching for on your website.
You can’t fulfil an order because you don’t have stock. Your customer either feels the frustration of a delay on an item that they ordered (and often paid for) or, worse still, they go somewhere else. Perhaps they need the item urgently. As much as they have enjoyed your products in the past, you have given them no choice, and have forced them into the arms of your competitor.
Loss of Customers
What are the chances that a customer who has had their needs satisfied by another business will come back to you? It’s nothing personal, it’s just business, right? What happens if your business gets a reputation in your area for frequently running out of stock? People simply don’t have the time nor the inclination to deal with poor planning.
Finding New Customers
These statistics on customer retention versus gaining new customers are sobering.
If we weigh up the investment in time and the cost of correct software for efficient inventory control against these statistics, how do you think your numbers would stack up?
Expedited orders will always cost you more. If poor inventory control has left you high and dry and unable to fulfil an order from one of your biggest customers, chances are you’ll “make a plan.” Pressing your suppliers or manufacturers for urgent orders lowers your profit margins by increasing your overheads. Yes, it may be necessary at times – after all – we can’t predict every eventuality, but it should be the exception rather than the rule.
Too Much Stock
Surely there’s no such thing as too much stock? Actually, you can have too much of a good thing. You may think that you’re trading a little excess inventory for security, but is that really the case?
We understand the importance of cash flow, especially for small businesses. However, when that all-important cash is tied up in stock you may encounter some challenges. For example, no matter how valuable your inventory is, and how much security it offers, you will still need to pay rent, salaries, debts and purchases.
Taking advantage of special offers or discounts on bulk purchases from your suppliers may not be possible without compromising your cash flow.
Nothing lasts forever, and in our consumer-driven society trends that are in this month may be out the next. Damage to products whilst in storage, spoilage of perishables, degradation, or obsolescence are factors that we have almost no control over. These can erode the value of our stock if it’s not moving fast enough.
Storage and Warehousing Costs
Stock storage costs money, and the more space you require the higher the expense. It’s not simply the floor space that you have to concern yourself with though, as an overstocked warehouse is difficult to navigate and things can get lost or broken. If your storage areas are full of redundant items, then you won’t have the space you require for fast-moving goods that keep business ticking over.
Inventory Control Systems that Work for SMEs
Too much or too little inventory has a knock-on effect which impacts customer service, staff efficiency and cash flow. Poor stock control hinders nimble decisions which would ordinarily help us to get ahead in our fickle economy. It costs us time, opportunity, and customers.
We can see how an accurate, real-time inventory management system would benefit all sized businesses and help them find that essential balance.
How much is an efficient inventory control system worth to you? Only you can answer that. But while you do your sums, we’d like to highlight some of the remarkably agile features that Omni’s inventory control systems bring to the table.
Omni’s stock control module helps to:
Claire from Graduate Print & Copy says “We have a busy print shop and chaos was the usual order of the day. Omni was the only accounting software package that could help reign in ALL the facets of our business as we found the software to be flexible as opposed to other generic products that are on the market. The consultants have made themselves available every time we required them, so much so, that for a couple of weeks they were a permanent fixture at our offices to ensure we understood the system and we’re able to use it to its full capacity.”
We’d like to encourage you to call on our friendly and professional team to chat about an inventory control solution that would work best for you. We know our stuff and have been offering practical, affordable solutions for decades.
Contact us today and leave poor inventory control practices behind.
What Are the Best Practices for Stock Control Optimisation?
One of the biggest balancing acts for manufacturing and retail industries is ensuring sufficient product availability for customers while minimising the risk of overstocking. Here’s a look at how you can optimise stock control to achieve this balance.
Inventory Optimisation vs Inventory Management
Just to touch on the terminology, it’s important to differentiate between inventory optimisation and inventory management.
However, it’s safe to say that the two do work together to ensure your business is running as cost-effectively as possible.
How Do You Optimise Stock Levels?
At the heart of it, stock optimisation is achieved through forecasting demand and then managing the supply variables within your particular inventory parameters. There are certain techniques that you can implement within your business to optimise stock levels, thereby lowering costs and boosting your productivity.
What Are the Best Practices in Inventory Optimisation?
Businesses that aren’t looking for ways to optimise inventory are missing out on massive cost-saving opportunities. With the development of digital techniques, it’s becoming much easier to optimise stock. Here are a few of the current best practices.
Internal communication within your business, as well as external communication with your supply chain partners, must be optimised to ensure collaboration. This will guarantee elements such as quality control are checked at every stage, with more efficient overall operations.
Consider a Just in Time (JIT) Inventory System
The JIT inventory system means having the right products and materials at the right place in the right quantity. This is a form of cost-minimising as you save on storage. To implement the JIT system, you need to develop strong relationships with suppliers, reduce your production cycles, improve quality control and implement accurate forecasting.
Track the Supply Chain
Modern businesses need to rely on up-to-date information across the supply chain so that everyone knows the location of the stock at all times. New technology – mobile devices, barcode scanners and tracking devices – all work to improve your tracking of the supply chain. This real-time data lets you know if something is wrong so it can be immediately rectified, and you can also identify cost-saving solutions through this overview.
Create an Inventory Plan
Using inventory optimisation software, you’re able to gather accurate data that can then be used to create an effective inventory optimisation plan. The data required will be your current inventory, lead time, standard costs, orders and Bill of Materials (BOM). By implementing a clear inventory plan you can be assured of standardisation across operations.
Use Consignment Inventory
To decrease the cost of inventory and optimise stock control, you can look at implementing consignment inventory so that a portion of your inventory is stored with your supplier until it’s sold. Online retailers often use consignment inventory, only buying the actual inventory when it’s been sold.
Manage Pipeline Inventory
For eCommerce retailers, in particular, pipeline inventory can be an area to reduce cost. During this stage, the stock is under the control of third parties, sometimes being imported across borders. By improving pipeline inventory, you’re minimising risks associated with missed orders, late deliveries, manufacturer mistakes and delivery delays.
Minimise Lead Time
This is the length of time it takes from ordering inventory to delivering the goods. When your lead time is too high, you’re holding onto safety stock and this leads to bigger holding costs for extra storage. To minimise your lead time, you have to develop strong supplier relations thereby negotiating faster lead times and improving flexibility for re-ordering.
Improve Inventory-holding Costs
Whether the stock is stored in your warehouse or by a third-party operator, it’s important that you practice efficient storage with better layouts, and updated handling equipment. Effective use of storage space is vital, but you can also look at alternatives to warehouse storage, such as third-party storage or vendor-managed options.
More Effective Forecasting
One of the most impactful stock control optimisation techniques is improving your forecasting – determining whether you need to increase or reduce stock levels. You can incorporate stock optimisation software to manage data from a variety of sources so that you’re benefiting from accurate forecasting. This will determine seasonal shifts in purchases and anticipate fluctuations in demand.
It’s important that you don’t remain complacent in your inventory optimisation, but rather constantly seek ways to make improvements. This will ensure you meet complex and ever-changing customer demands and keep up with competitors. It requires periodic reviews, running continuous improvement programmes, and reducing cycle and lead times. This can be done by establishing data-driven decision-making for the business.
What Are the Benefits of Stock Control Optimisation?
When you implement best practices for stock management and optimisation, you’ll immediately start reaping the benefits associated with enhanced storage. Here’s a look at a few of the benefits you can enjoy.
Lower Working Capital
You’re actively decreasing the amount of capital by lowering the amount of inventory stored. This provides you with sufficient financial savings that can be redirected elsewhere.
Reduce Turnaround Times
Using effective stock optimisation practices, you’re able to improve turnaround times through effective forecasting and minimising lead times. This results in less excess stock and the need to sell stock at reduced amounts later on.
With supply chain oversight, you’re improving operations by ensuring products are getting to customers on time. There are much more efficient operations as you’re not impacting the flow of products.
Your accurate forecasting and improved supply chain management mean that your customers get what they want when they want – which equates to a better customer experience. With optimised processes, you’re driving brand loyalty.
A system that works makes for a happier workplace. By following best practice for stock, your staff is confident in the knowledge that they’re selling the right products to the right people. They’re also empowered in tracking the product through supply chain transparency.
Contact Omni Accounts, leading suppliers of digital solutions that improve operations quickly and effectively. They can provide you with the ultimate stock control software that takes the hassle out of daily operations.
What You Need to Know About Food and Beverage Stock Control Systems
Food and beverage inventory control is important for minimising unnecessary waste while also avoiding stock shortages that could result in dissatisfied customers. Through accurate stock control systems, you’re able to save on costs and boost the bottom line.
Here’s what you need to know about this valuable system.
What Is a Food and Beverage Control System?
Food and beverage control systems allow you to accurately track your inventory, prompting precise inventory purchasing that minimises product waste. For those in the food industry, optimising inventory control is vital to ensure targets are met and profits are increased. This can be achieved by implementing ERP (enterprise resource planning) software, an integrated inventory control system for perishables.
Top Reasons for Food and Beverage Waste
Without an effective inventory control system, you’re risking excess food and beverage waste which is bad for business. Here are the top three ways you risk perishable waste when not implementing an effective stock control solution.
1. Not Tracking Sales
By not monitoring food and beverage sales, you risk over-ordering certain items that won’t be used in time. With an inventory control system, you can keep an eye on what food and beverage items move quickly, and which ones don’t. This makes for a more strategic control system.
2. Incorrect Labelling
When food and beverage items aren’t labelled with the correct best-by dates, you’re running the risk of letting food spoil. A stock control system will include clear labelling so that you can follow the FIFO (first-in, first-out) storage method for optimum stock control.
3. Poor Portion Control
For those in the restaurant business, not anticipating correct portion sizes can be detrimental to your bottom line and result in unnecessary waste. By standardising your measurements you’re able to reduce waste while still meeting customer requirements.
What Are the Inventory Control Systems?
There are a number of inventory control systems you can implement for the food and beverage industry, but these are the most popular ones to consider.
ABC Inventory Management
The ABC Inventory Management system works on the 80/20 premise where 80% of the business profits are derived from 20% of its inventory. By understanding where the inventory fits in, you’re able to strategically allocate funds, resources and labour for increased turnover. Your inventory is effectively categorised into A, B and C:
A: These are your most valuable items which are the smallest in quantity; the inventory that requires your most attention as they are the highest value.
B: Stock that has an average value and quantity.
C: The majority of stock items that have a lower value but take up the most space.
First In, First Out (FIFO) Inventory Management
First in, first out (FIFO) is a system where you arrange your stock so that the first items that come in are the first items to go out. With this method, you’ll organise your storage areas accordingly, with perishables arranged in the fridge, freezer, shelves and dry storage to minimise waste.
Just-in-Time (JIT) Inventory Management
This system focuses on using what’s needed when it’s needed and in the correct portions. The JIT system will establish a zero inventory method that operates on a pull system –when an order comes through, it sets off a response in the supply chain signalling the need to order new inventory.
Just-in-Case (JIC) Inventory Management
With the Just-in-case (JIC) strategy, companies will keep extra inventory on hand so that they never go out of stock. This requires the organisation to predict consumer demand where possible, while still factoring in unpredictable spikes. There will be higher inventory storage costs and product waste.
Benefits of Inventory Control Software
There are so many ways that food and beverage stock control software can improve your overall operations. Here’s a look at some of the benefits.
– Supply Chain Visibility
Because you’re dealing with perishables, it’s important that you’re able to account for every item at any time. This can be achieved with inventory control software that allows for demand forecasting through purchasing, manufacturing, distribution and sales. This way, your food and beverage stock is always kept at optimum levels.
Sophisticated inventory control software is highly customisable which means it will align with your business’s unique supply chain. Your existing business data can be integrated with that of your suppliers, thereby ensuring constant communication and avoiding the issue of running out of stock.
– Improved Efficiency
By automating your inventory control, you’re effectively improving procurement, production, distribution and sales overall. For food manufacturers, in particular, the automated supply chain monitoring will keep waste within the lowest margin, if not eliminating it altogether.
– Product Recall
Stock control systems will also allow you to minimise the likelihood of product recall. However, if there is the need for product recall, for whatever reason, you can effectively and efficiently recall the items using the system.
Tips for Effective Food and Beverage Control
To get the most of out your inventory control software, here are a few tips to keep in mind.
– Get your staff on board
For your stock control software to be effective, you need to get everyone’s buy-in. This means outlining exactly how the system works and how it will improve their daily duties. To achieve your stock control goals, it’s worth training your staff so that they can use the software with ease.
– Create a team
Once you’ve got your staff on board with the stock control software, you need to put together a team that will be in charge of overseeing the entire system. This shouldn’t be to the exclusion of other staff, however; it just helps to keep things running smoothly.
– Get organised
Food and beverage inventory software is only effective if it’s paired with a well-organised business. Make sure your stock room is orderly, and your stock is tidy and clearly labelled.
– Perform regular stocktakes
A working inventory management system requires regular stocktaking. This means establishing a schedule and getting your inventory team to stick to this.
Ultimately, you need to invest in inventory control software that is customised to your industry needs. Omni Accounts is able to find the perfect software solution to manage all your food and beverage inventory control needs.
How ERP Can Improve Your Warehouse Management
Learn how ERP can improve your warehouse management and help you take control of your processes more effectively and efficiently. This is all you need to know about ERP solutions for warehouse management.
Enterprise Resource Planning (ERP) is a system that allows for the automation and integration of business processes across all industries. ERP tools cover various processes, including finance, human resources, distribution, manufacturing, services and more.
What Is a Warehouse Management System?
Your warehouse management system (WMS) controls all the storage and movement of your inventory while providing your organisations with updated, real-time data. This way, you know precisely where any piece of inventory is at any time. The WMS uses a range of features for its operations, including barcode scanners, mobile devices, and radio frequency identification (RFID) technology.
What Is the Difference Between a WMS and ERP?
The main difference between these two systems is that the WMS operates as a standalone system, requiring other supporting software for daily functioning such as accounting and customer relationship management. ERP is a fully integrated solution with warehouse management capabilities.
What Are the Features of ERP for Warehouse Management?
If you’re in the manufacturing, distribution, or logistics industries, warehouse management is one of your core functions. Modern ERP software solutions empower such businesses with impactful features for ease of operations. Here are some of the ERP features that will directly improve warehouse management:
Benefits of ERP for Warehouse Management
ERP systems have evolved to the point that they’re starting to replace traditional warehouse management systems. Here’s a look at how ERP benefits warehouse management.
One of the primary ways in which ERP software enhances your warehouse’s management is through its inventory management features. ERP will track your inventory, automatically updating your records and eliminating the risk of lost stock. Other ways you benefit from inventory management include:
Through ERP software, you can give employees picking orders for more efficient warehouse operations. Employees can pick accurately and reduce wasted time. Updated picking orders can also be done when it comes time to move products, such as those that are more in demand.
By implementing ERP systems for warehouse management, you’re effectively getting rid of the tireless manual warehouse spreadsheets which need constant updating. This means that, with any changes made to the inventory, you won’t have to disrupt everything and physically update the spreadsheet. This is all presented on an easy-to-access visual dashboard which minimises the risk of error.
Through the ERP system, you’re able to customise the modules to fit your operations better. You can customise specific features related to quality control, cross-docking, sales, and transfer – whatever works for your particular business. You can also add and remove modules as you need.
Decrease Operating Expenses
There are so many ways that implementing an ERP system will save you in the long run. You’re able to keep track of all materials, products, and equipment for optimised workflow, reducing the need for manual operations. There is also so much more accuracy with ERP software as it reduces the risk of data redundancy and incorrect input.
Improved Customer Service
These improved operations – and the increased speed of operations – through ERP systems make it easier to provide better customer service. Orders are delivered on time, feedback provided quickly, and stock levels maintained for an enhanced customer experience.
What to Consider When Choosing Erp for Warehouse Management
You’ve learnt of all the benefits of implementing ERP for warehouse management, so now it’s time to consider which ERP software to invest in. However, before making this decision, here’s a look at some important factors in ERP selection.
- Determine Your Warehousing Needs
ERP for warehouse management is industry-specific, so you need to be looking at ERP software designed for this particular industry. Added to this are your specific warehousing requirements. You need to analyse exactly what features are needed for your particular business operations and how ERP software can actually help. What are your warehousing goals? What are the challenges currently being experienced? What are your crucial warehousing operations you want automated? Once you have a better understanding of your warehousing needs, you can hone in on the ERP system for you.
- Determine the Scalability
No business owner wants their business to stagnate, so it’s vital that you consider your potential warehousing growth when looking at your ERP software options available. You know what features you currently need, but you will also need to consider your future needs – how will your business grow and is the ERP system capable to accommodate this growth? Look for an ERP solution with continuous improvement and scalability.
- Consult With Stakeholders
Your stakeholders and employees will need to give input on this impactful business decision as they, too, have intimate knowledge of the business operations, areas for growth and improvement. By getting everyone on board from the start, you’re ensuring a much more seamless integration of the new ERP system and less disruption to daily operations.
- Consider Software Integration
Your warehouse management ERP software may need to integrate with existing operational software. If this is the case, you’ll need to check with the ERP vendor whether this is possible so that you’re not starting everything from scratch. Point-to-point integration connects ERP with other software, whereas customised applications work with your business needs and integrate various tools. There are also Enterprise Services Buses (ESBs) that connect applications using centralised tools.
- Consider the Support Given
You might have found the ideal ERP software, but you need to ask about the training and support provided by your ERP supplier. This allows you to take full advantage of the ERP software features, and keep adapting as the software updates. Omni Accounts is a leading ERP software provider, ready to meet all your warehouse management needs!
What Are The Methods Of Inventory Management?
Order, track, and control your company’s inventory in real-time through various methods of Inventory Management – and learn where you can improve your inventory control processes.
What Is an Inventory Management System?
Forming part of the supply chain process, inventory control management is the complete tracking of all your inventory and stock quantities at any given time. An inventory management system will also monitor inventory levels at any time, ensuring you have sufficient stock for the anticipated demand. Often an inventory control management system can integrate with other software systems, such as point of sale (POS) and shipping, for more seamless operations.
What Is the Role of Inventory Management?
Inventory management is a key factor within the supply chain process that prevents business-impacting errors such as overstocking, understocking incorrect shipping, or incorrect destination. The result of such mismanagement is a massive loss of revenue and time, which is why businesses are prioritising effective inventory management systems.
What Are the 5 Stages of Inventory Management?
When it comes to successful inventory management processes, there are five key stages from the warehouse through to the customer:
- Purchasing: the buying of raw materials that are converted into finished products.
- Production: The manufacture of products using raw materials.
- Holding stock: This is the storage of raw materials as well as finished products, usually in warehouses.
- Sales: The movement of your stock to customers and the transfer of funds to your business.
- Reporting: The tracking of all sales and profits being made.
What Are the Types of Inventory Management?
There are many different types of inventory management across these five stages, depending on the particular business and industry type. Here’s a look at some of the more prominent ones.
• Economic order quantity (EOQ)
Economic order quantity (EOQ) is a formula that uses variables like production costs and demand rates to determine the amount of inventory a company should purchase as a way to minimise costs. The EOQ seeks to purchase the lowest number of units while still meeting demand, so the company doesn’t over-or under-stock.
• Minimum order quantity (MOQ)
Suppliers also rely on inventory management systems such as MOQ which is the minimum amount of stock they will sell to a retailer.
• Just-in-time (JIT) inventory management
Just-in-time (JIT) inventory management reduces inventory costs by securing raw material orders from suppliers according to production schedules. This means companies don’t sit with ‘deadstock’ – inventory that just can’t be moved and costs a company.
• ABC analysis
This inventory management technique categorises your products in order of importance, considering elements such as annual consumption, inventory value, and cost significance. You’re looking at three categories:
A: The most valuable products.
B: Products sitting in the middle of demand.
C: The least valuable products.
This form of inventory control management is great for forecasting, enhancing inventory accuracy, and allowing for more strategic pricing.
• Consignment inventory
Through this system, the vendor agrees to provide a retailer with products without an upfront payment. The payment is only made when the products sell. This system is beneficial to the retailer in that they’re able to offer customers a variety of stock without requiring significant capital; it reduces the time delay of re-stocking; and eliminates overstocking. However, the supplier will also benefit from gaining useful insights into new products, including product performance in specific markets.
• Safety stock inventory
When there has been incorrect forecasting, safety stock inventory management allows for the ordering of extra inventory to meet a sudden spike in demand.
This form of inventory management system involves third-party suppliers whereby a store will sell the stock it doesn’t have in stock. Instead, these items are sourced from another supplier, and shipped to the consumer, thereby reducing the cost of storage.
Another way to eliminate costs related to warehouse storage is cross-docking. In this instance, trucks or trains will offload material onto outbound trucks and trains which deliver to the customer.
• Bulk shipments
As the name suggests, this inventory management technique involves the transfer of goods in bulk. All inventory is stored on pallets and transported to the customer – generally big retailers. The cost of warehousing is generally offset by the benefits of bulk shipments such as profitability and lower shipping costs.
Backordering demands effective inventory management involving the quick creation of new purchase orders. Companies take orders and payments for products that are not actually in stock. This does mean increased sales, but delivery delays, so companies will often differentiate between ‘Buy now’ or ‘Pre-order’ for customers to manage expectations.
• First In First Out (FIFO) vs Last In First Out (LIFO)
First In First Out (FIFO) sells older inventory first to keep inventory constantly replenished, whereas Last In Last Out (LIFO) prevents inventory from going bad. This will depend on the type of stock you’re storing.
• Batch tracking
This inventory management technique allows users to monitor stocks with similar traits as a way to prevent the stock from passing its expiration date.
• Perpetual inventory management
Perpetual inventory management is the ongoing tally of inventory as it arrives in warehousing, which was previously done manually using a spreadsheet.
• Demand forecasting
Looking at previous sales, retailers can estimate the customer demand going forwards so that there is limited over- and under-stocking.
How Do You Improve Inventory Management?
There are always improvements that can be made, and when it comes to inventory management, these can translate into extensive cost savings. Here’s a look at some of the techniques you could employ to enhance your inventory management.
• Do a needs analysis
By fully understanding your inventory needs, you can better implement an inventory management system that will streamline your product movement. Included in this is an analysis of your actual inventory, prioritising inventory that needs to move fast and that which has a longer storage capacity.
• Build supplier relations
The key to a well-organised inventory management system is the development of good relations with all suppliers. This means that you’re not only benefitting from a reliable supply, but you’re also able to call on them when there is an unexpected demand as well, resulting in improved customer relations.
• Ensure data accuracy
Updated and accurate data is vital to any inventory management system. This allows you to forecast trends and meet all demands as and when they arise.
• Incorporate mobile options
All business operations are going mobile, and this includes inventory management. Elements such as barcode scanning and sales’ apps mean that employees aren’t restricted to warehouses and offices anymore. This means more oversight and efficiency.
• Invest in an inventory management system
A comprehensive inventory management system is the best way to tick all the boxes and make sure your business is on top of its inventory. Through a dedicated management system, you’re able to customise the inventory management according to your business needs and tweak operations going forward.
Signs You’re in Need of Inventory Management Software
If you’re still unsure as to whether an investment in software is right for you, then here’s a look at some of the signs you should be looking out for.
1. You keep running out of stock
If you’re at your wits’ end because you somehow keep running out of stock, despite all your efforts to the contrary, then it’s probably time for you to invest in an inventory management system. Through the software, you’re able to automatically track all inventory levels and make orders in time, while also not sitting with too much stock.
2. You’re always dealing with customer complaints
Customer acquisition and retention are central to the survival of any business. If you’re having to deal with ongoing customer complaints about late deliveries or incorrect items, then you need an inventory management system. The system will not only ensure sufficient stock but will keep in communication via automatic email updates, outlining the processing, shipping, and delivery of items.
3. Too much time is being spent on stocktaking
The manual stocktaking process is not only a risk in terms of human error; it’s also incredibly demanding on staff time. If you’re finding too much energy is being spent on stocktaking and analysis, then it’s time for inventory management software. You’re able to monitor inventory in real-time continually, and benefit from updated inventory information.
4. You’re not keeping up with the increased inventory levels
While a spreadsheet was once sufficient to keep track of stock, as your business has grown, this has become an unreliable method of inventory management. Inventory management software is a scalable solution to your business’s ever-growing needs.
By investing in a customised inventory management solution, you’ll benefit from the comprehensive features that were once time-consuming tasks for staff. In addition to the scalability, efficiency, and cost-effectiveness, you’re able to access all inventory data on a fully personalised, visual dashboard that is continuously updating. Ensure you’re partnering with a reputable vendor that can provide you with specialised insight into inventory management.
What is inventory control and management?
The ability to forecast inventory requirements, as well as manage existing inventory stock will drastically impact business operations for the better. Here’s a look at what it means for your business.
This refers to the inventory currently in your warehouse, knowing exactly what is there, where it is, and what condition it’s in.
This refers to the forecasting of which products to order when, and from which supplier. Instead of simply referring to your warehouse, inventory management refers to complete supply chain management.
Inventory control methods
When it comes to inventory control, there are certain methods that can be adopted to optimise efficiency. In modern inventory control, these can all be digitised by implementing effective inventory control software. This will cover:
– Inventory tracking
Keeping track of what inventory is currently available can be done manually, but it’s much more effective to keep track using software solutions. These could incorporate RFID (radio frequency identification) whereby barcodes are scanned and products logged.
– Inventory administration
Alongside stocktaking, inventory control incorporates various administrative aspects such as monitoring purchase orders, deliveries, returns, and requisitions.
The importance of inventory control
A reliable inventory control system will alleviate a business of administrative hassles and streamline operations. Here’s a closer look at what effective inventory control will mean for you.
– Improved accuracy
Unlike manual stocktaking, inventory control systems will elevate the accuracy of your stock records. Minor errors made when manually taking stock can snowball, resulting in drastic over-or under-ordering.
– Track sales’ patterns
Inventory control software will allow you to assess which stock is most profitable, thereby outlining useful patterns that can be used going forwards. This type of control system will also identify any inconsistencies such as stock theft.
– Increased efficiency
Manually locating items in a warehouse can be time-consuming and impacted by error. By implementing an effective inventory control system, you’ll be able to increase the speed and efficiency of this process.
– Boost customer satisfaction
An effective system that identifies sales’ patterns, increases accuracy, and improves overall efficiency will also result in happier customers at the end of the day. Satisfied customers will return, which effectively increases productivity.
Types of inventory management
We’ve looked at the in-house inventory control, now to take a closer look at the various types of inventory management systems you can consider.
– Periodic inventory management
This type of system allows you to keep a tally of your inventory periodically, with changes calculated between these counts. This provides you with the inventory sales and items to re-order.
– Perpetual inventory management
This is a much more frequent system of inventory management whereby stock is recorded daily, providing you with the latest inventory tracking.
– Maintenance, repair, and operations (MRO) inventory management
This system tracks the location of the stock and keeps track of the condition of the items.
Factors impacting inventory management
There are many elements that must be considered when trying to enhance the effectiveness of your inventory management. Here are the key factors:
- Finance: Warehouse expenses, transportation costs, and actual inventory costs will all come into the inventory management system.
- Suppliers: An unreliable supplier will have knock-on effects that can be detrimental to inventory management.
- Manufacture: The time it takes from ordering an item through to arrival will impact inventory management, and an outsourced manufacturer might delay the process.
- Products: The type of product will determine inventory management as perishables will obviously have a shorter shelf life.
- Management system: An effective inventory management software solution will be much more effective than manual management.
Importance of inventory management
There are so many benefits to implementing a successful inventory management system. As with good inventory control, an effective inventory management system will:
- Organise your warehouse: An organised warehouse makes inventory management that much easier. This system can categorise stock according to priority, ensuring easily located placement.
- Improved accuracy: You’ll know how much inventory is available at any time, for re-stocking where needed.
- Time and cost-saving: When the stock is constantly monitored, there is no need to do inventory re-counts or analyse which are the slow-moving stocks.
- Increased productivity: Once again, the elimination of manual stock management and increased accuracy will boost productivity. This allows you to shift your focus to other business-enhancing ventures.
Objectives of inventory control
At the end of the day, your inventory control system must work to:
- Supply the product to the end-user on time and intact.
- Minimise waste, surplus, and obsolete products.
- Maximise productivity and efficiency.
- Lower storage and replacement costs of inventory.
- Protect against inflation by saving when the price of materials increases.
It’s worth partnering with a renowned software supplier. This will allow you to analyse your particular inventory needs, and identify areas to improve productivity.
How ERP Systems Improve Inventory Cost Management
ERP systems, or Enterprise Resource Planning, are designed to help a business manage all business operations from a single point or location- one of those factors being inventory cost management, or simply put as stock control. An ERP system can help businesses to streamline their inventory holding costs by providing a clear overview of records and data, and how they connect to every business function, across the whole company. Inventory management involves the ordering, storing, and shipping of a company’s stock or products. Inventory Management has as its core goal, to reduce holding costs and provide accurate and timely updates and alerts when to re-order, re-stock or manufacture goods. Mismanagement of inventory holding can result in either lost sales due to out of stock issues or tying up excessive cashflow- or even worse writing it off- because of excessive, bad, or dead stock holding. Inventory or stock-holding, ultimately, is an expense. It is an expense a powerful ERP system is designed to reduce.
What is Inventory Cost Management?
Inventory cost management sounds as simple as keeping enough, but not too much, stock on hand, but it can be far more complex in practice. Inventory represents somewhere between 30% and 50% of a business’s operating assets, a figure not to be overlooked. Various company functions have different views on stock, with sales often favouring optimistically higher inventory levels, warehousing preferring lower levels for practical manoeuvring, purchasing wanting to take advantage of bulk discounts- and management not wishing to tie up valuable cash flow in stock. When combined with the changing waves of supply and market demand, inventory cost management becomes a tricky process.
How can ERP systems help streamline Inventory Cost Management?
An ERP system helps inventory management by taking information from all aspects of your business to best inform you of what stock to hold, when, and how much. It does this by gathering real-time and historical data, to create an accurate assessment of productive, margin enhancing stock versus slow-moving, margin depleting stock. It uses current and historical data to predict future stock needs and optimum levels. Specific areas of benefit are:
Reducing Excess Inventory
Too much inventory reduces liquidity and increases overheads, but forecasting too conservatively can lead to inventory shortages. Seasonal products add another layer of complexity to inventory cost management. If a company is uncertain how much inventory it has or how quickly it is selling through it, stockpiling large amounts of inventory may seem like a good idea, but it is costly. An ERP system can analyse historical sales data and past seasonal trends to set realistic safety margins.
Avoiding Dead Stock
ERP systems work by creating trackable records through assigning SKUs numbers, expiry dates, units of measure, serial numbers, lot numbers, and attributes. These enable an ERP system to keep an eye on expiring and slow-moving items. ERP Inventory Cost Management works by keeping tabs on the stock that is sluggish or about to expire and historically unprofitable items. A strong ERP system will alert timeously about stock expiry so that loss-limiting action can quickly be taken. It will also alert to slow-moving costly inventory items, allowing a business to keep stock levels as low as possible on those particular lines.
System Cost Savings
Efficiency translates into cost savings Rather than paying for different systems or processes to handle various parts of the business, inventory cost management being one of them, an ERP system handles many changing parts of the process simultaneously, reducing overall staff workload (and costs) and minimizing system expenses. But it goes further than that. Time-saving, decreased double handling, automation of daily tasks- leads to increased production and more accurate output, which allows for better business planning.
ERP systems can streamline warehousing and storage aspects of the business by adding key attributes to products that provide information on the location of items within the warehouse, storage requirements, sales rates as well as instructions such as special handling needs.
Customer Service Level improvement
More obviously ERP systems help inventory management in terms of preventing excess stock holding, but equally, they are just as powerful in avoiding out of stocks (OOS). By assessing fast-moving and seasonal surges in demand, a business is better able to deliver to the customer as and when required, avoid lost sales or disgruntled customers due to out of stocks. Historical tracking of stock items by buyer also helps identify top-tier customers per product line, which assists in demand planning as well as relationship building. For longer lead-time stock items an ERP system can keep tabs on the available and inbound stock to ensure customers receive up-to-date and accurate information on availability.
Supply Chain Transparency
Increasingly businesses are using third-party logistics providers (often referred to as 3PLs, TPL or shipping providers) and outsourcing their logistics, warehousing and shipping needs. An ERP system linked into inventory cost management can enable you to link into your external trade partners – and communicate stock, ordering and shipping information seamlessly, efficiently and in real-time with your logistic suppliers.
Enable Business Expansion
As your business grows, streamlining and automating processes becomes more critical and an essential factor in allowing your business to grow without costs escalating excessively. An ERP system that handles areas like inventory cost management as part of a wider integrated business function matrix is an invaluable tool in controlling your business as it expands.
ERP systems have a powerful role to play in any business that is subject to the demands of complex inventory management.
The Benefits of ERP in Logistics
What is an ERP system?
An Enterprise Resource Planning (ERP) system allows an organisation to effectively manage its flow of information in a central hub by combining all business functions in an easily accessible software feature. There are many benefits to using an ERP system across various industries, and for logistics, in particular, ERP can be a powerful tool to manage the flow of daily information in real-time data, that can be accessed by anyone, anywhere.
A breakdown of logistics
Logistics, much like Supply Chain Management (CRM), involves coordinating and transferring resources from a supplier to the desired customer or storage facility. Where Supply Chain Management looks more at outside organisations working together to deliver the desired product, logistics is a more holistic approach within a specific company. Logistics looks at the whole process – from the purchase and delivery of raw materials, food and liquids, to the packaging of products, and the final transportation of goods to customers.
Some of the components of a logistics company
- Inbound and outbound transportation
- Fleet management
- Materials handling
- Production and packaging
- Inventory management
- Security of goods
How an ERP system can assist logistics
An ERP system can assist logistics companies in managing their company more effectively, helping to reduce risks and company costs. Some of the ways that an ERP system can benefit a logistics company include:
- Inventory Control
- Staff management
- Customisable system
- Reduced costs
With ERP software providing for one centralised system, all information required to run a logistics company can be captured in one place – including orders, inbound and outbound sales, deliveries, and more. This captured information allows the company to make informed decisions and future predictions for the company based on historical data that the ERP system provides. The decision-makers can look at previous sales trends or delivery times and make changes where necessary based on this information.
The real-time data allows immediate notification of out-of-stock products, inbound orders coming in, outbound orders that need attention, and any problems with deliveries as they occur.
The distribution side of a logistics company is one of the most important aspects of the business, as it involves precise management of the flow of distributions and control over the transportation of goods.
An ERP system provides the solution to manage the flow and distributions effectively by gathering all the necessary information in one central hub.
For transportation purposes, the ERP system can manage the transportation of goods, ensuring customers and suppliers receive their products on time. The system also allows for live communication between the drivers and coordinators, sending live traffic updates, customer addresses, and any emergency information, such as transportation issues.
Managing staff can become quite tricky, especially within a logistics company, where staff can be in various places around the country or even the world. Staying on top of staff responsibilities and whereabouts can be difficult, but with an ERP system in place, managing staff is made easy. Some of the ways managers can benefit from the ERP system with regards to the staff, include:
- Employee working hours and lunch breaks/rest periods
- Employee information and paperwork
- Tracking staff on the road during transportation
- Payroll and staff increases and bonuses
- Staff performance
- Sick and paid leave days
- Managing casual and permanent employees
- Providing a list of backup staff members or casual employees in case of an emergency.
Most logistics companies will have specific ways in which they run their business, running personalised software options to match the needs of the business. An ERP system allows each company to personalise their system to benefit them and run their company data in the most accurate way.
The accurate, real-time data that an ERP system provides allows companies to reduce their monthly expenses, being able to make informed decisions quicker and more accurately. By not having to wait for information and feedback, the decision-makers in the business are able to attend to issues or make changes where necessary as soon as possible, before it becomes a huge expense to the company. This allows the logistics company to maintain and increase productivity monthly.
The ERP system provides a detailed analysis of each customer and a record of all their information, allowing the company to build personalised relationships with customers. The real-time data also reduces the risk of mistakes, delayed deliveries, and unfulfilled promises to customers.
Logistics plays an essential role in the running of a country, by providing a streamlined approach to the design, production, purchase, transportation, and storage of goods to various businesses. The more streamlined the logistics company can be, the more profitable it becomes for not only themselves but their customers as well. Using an ERP system, for this reason, is hugely beneficial to all stakeholders involved in logistics.
Contact Omni Accounts for help on getting your logistics company up to speed with the latest ERP software, to help streamline your business.
What is Inventory?
Inventory (also referred to as stock) can be defined as the products or items which are sold by a business or used to manufacture products that are then sold.
In a manufacturing business, inventory falls into three main categories: raw materials, finished goods and work in progress (WIP). Raw Materials are the items that will be used to manufacture finished goods. Finished goods are items that are the result of the manufacturing process. Work in Progress refers to the raw materials which are currently being used in the manufacturing process.
In a retail or wholesale business, there is normally simply just inventory or stock which is purchased and then resold.
What is Inventory Control?
There are two main aspects of Inventory Management. The first aspect is to ensure that there is enough stock to fulfil customer orders as well as any manufacturing processes which might be needed to fulfil these orders. The second aspect is to ensure that the stock holding is not excessive, too expensive or unnecessary. A key stock holding level to aim for is an optimum level.
In summary, inventory control is the processes utilised to maximize a business’s use of inventory. The goal of inventory control is to generate the maximum profit from the least amount of inventory investment without intruding upon customer satisfaction levels.
Importance of Inventory Control
Inventory is classified as an asset in a business and as such, needs to be carefully managed. A major part of a business’s cash resources can be tied up in its stock holding.
Ensuring that the products that a business sells are available without being overstocked are critical. Being unable to fulfil a customer’s order results in lost revenue and often in a lost customer. On the other hand, having too much stock ties up cash resources, can result in issues with warehouse space and, depending on the product, may risk stock write-offs due to expiry dates being reached.
Inventory purchases should be carefully managed. Buying in bulk or from a single supplier can reduce delivery costs and attract volume discounts. However, the cost of the purchases, as well as delivery lead times, need to be taken into account as suppliers have different prices and lead times.
Stock shrinkage or wastage should also be carefully monitored as this is effectively an asset write off and impacts the profitability of a business.
In a business that has a large stock holding, it is important that stock is easily located and obtained to ensure that customers’ orders are quickly and efficiently picked. Warehouse space is expensive and efficient storage is essential to maximise space usage.
Knowing exactly what the cost is of the inventory a business sells is critical to determine what the selling price should be in order for the business to be profitable. It is rarely as simple as just putting a mark-up on a cost price.
How can Inventory Control software help?
Unless a business is able to track inventory at every stage: procurement, storage, work in progress and sales, it is impossible to effectively manage all the different aspects of Inventory Control. All of these areas are interdependent and inefficiencies in any area will cause problems in all the other areas.
Most of the problems listed below will be solved by having an Inventory Management software system that is part of an ERP solution.
- Is stock ordered mostly only when there is a shortage?
- Do you know how much stock to order and when it will be delivered?
- Are orders time consuming to make up because of searching for stock?
- Is data being captured more than once, perhaps into multiple systems, in order to manage inventory?
- Are spreadsheets or whiteboards used to manage activities such as picking orders, working out what needs to be manufactured etc?
- Are there stoppages in the manufacturing process due to raw material shortages?
- How easily can bottlenecks in the manufacturing process be identified?
- Are stock take counts inaccurate and time-consuming?
- Are customers able to obtain accurate delivery dates?
- Is there a lot of obsolete inventory?
- Do you know which your slow-moving items are?
- Do you know which your best selling items are?
- Do your sales reps sell products you don’t have or at the wrong price?
- How efficiently are products that have serial or batch numbers handled?
Inventory Control software helps to ensure data is entered once into the system and then all aspects of controlling inventory are updated. For example, capturing customer sales orders results in stock levels being checked and shortages highlighted. Once supplier purchase orders are captured, this information is reflected as being stock that is on order. With all of this information and having minimum and optimum stock levels per product, suggested purchase orders can be extracted and production schedules can be worked out. In a manufacturing environment Material Planning Requirement (MRP) reports and information can be extracted. Using costs on supplier invoices, costs prices are kept up to date, ensuring that Gross profit (GP) margins are correct. Using historical information, slow-moving and bestselling products are identified. This is a basic example of some of the advantages of an Inventory Control system.
Multiple Sales Channels
In today’s world, many businesses have multiple sales channels. Orders may be received from the business website (Ecommerce), telephonically, EDI (Electronic Data Interchange), email and Point of Sale (POS) just to mention the common channels. Trying to manage all of these different channels without an Inventory Control system is extremely difficult if not impossible. It becomes vitally important to handle these different sales channels in an integrated manner.
Serial & Batch Tracking Numbers
High-value products and products carrying warranties will be tracked with a unique serial number. Most of these serial numbers are barcoded. Trying to manage these types of inventory products without an Inventory Control system would be extremely difficult. Many products have batch or lot numbers, often with expiry dates. Furthermore, raw materials are tracked with these batch or lot numbers. In many sectors, such as retail, food and beverage, manufacturing, health care and more, it is a requirement to track the batch numbers of raw materials which were used in the manufacture of a product. An Inventory Control system will manage serial and batch number tracking, giving full control and the ability to track all raw materials and finished goods.
“The goal is not to improve one measurement in isolation. The goal is to reduce operational expenses AND reduce inventories and increase throughput simultaneously” – Eliyahu M. Goldratt
Omni Accounts offers inventory control functionality which is fully integrated. Omni Accounts offers a flexible and scalable inventory control solution that is suitable for businesses of all types and sizes.