Tips for inventory control in manufacturing
Inventory control is a vital part of the manufacturing process. Successful manufacturing companies know that they must keep a tight control on their inventory if they hope to run a profitable operation. However, many manufacturing business owners fail to realize the importance of inventory control and allow the day to day demands of running their business keep them from knowing what is going on with their inventory. This can be a serious mistake. Manufacturing companies that fail to control their inventory can soon find themselves in serious financial difficulty. Here are some tips for inventory control in manufacturing-
- Understand why it is so important to control your inventory-There are many different reasons that manufacturing companies need to control their inventory. These reasons include but are not limited to: maintaining enough inventory to satisfy either sales or market demands, carry the right amount of inventory to not tie up valuable cash reserves, having the right amount of inventory turnover, and having the reputation of being able to satisfy customer's demands in a timely manner when they order from your manufacturing business.
- Understand why it is important to plan your inventory-The basis of effective inventory control starts with being able to plan your inventory. When you are able to organize how much inventory you need you will be able to complete your production schedule in the most effective way possible. There is software programs that can help you plan your inventory and thereby establish better inventory control. Best of all, many of these inventory control software programs are designed for specific manufacturing industries or can be customized to meet your manufacturing needs.
- Understand why it is important to have order cycles-You can establish a ordering pattern on a regular basis if you can predict how much inventory you will need. This can be a tricky process but over time and with help you can be successful in ordering your inventory at the right time. You will need to be sure to consider the cost of ordering, any shipping, and any other applicable costs. This will help you to hold down the cost of ordering while still controlling your inventory. Successful manufacturing companies will make sure that they have the right amount of inventory to keep their production line working without having to warehouse or store additional inventory.
- Understand why it is important know your inventory-All to often manufacturing companies fall into a pattern of carrying inventory that is out of date or obsolete. With careful inventory control this should never happen. Knowing what you have in inventory is a crucial part of inventory control. Keep in mind that any inventory that becomes unusable is simply wasted cash. You want to especially keep a close eye on any inventory that can be considered seasonal. You should take steps to make sure that all inventory is utilized before it falls into the category of being obsolete.
- Understand why it is important to not only control your inventory but follow up on it-You should focus not only an initial control process of your inventory but you will need to follow up on your inventory control processes. It is important that you are always looking at ways to make your inventory control more effective. You should keep in mind that the market can change quickly and you may have to make significant inventory changes in order to respond to this. The manufacturing companies that are able to do this remain profitable even when times become tough. In addition, it is important to train everyone within your organization about the importance of inventory control.This is the best way to make sure that your inventory is an asset to your manufacturing company and not a liability.