Business

Supply Chain Management; Using the Proper Tools for the Proper Job

Traders along the Silk Road had a method for inventory management called hand-tracking. Some used tally sticks. You can be certain the Dutch East India Trading Company had more sophisticated methods to control sources of supply and production.

Enter the dreaded spreadsheet. In one form or another, inventory and spreadsheets have been married for a long time. Poor accuracy when logging, generated poor efficiency. There is no difference today. “Garbage in, garbage out” is an old programming term intended to increase focus on the accuracy of data input for desired results.

The best inventory management software can not prevent poor data entry. To operate without an effective system is the same as handing over your profits to competitors. Industry competitors are using a cloud-based system for their management. To obtain greater market share you will need a system that is accurately maintained.

Customer relationships, accounting, and inventory management can be combined into one powerful tool known as CRM. Old spreadsheets can be used to populate your system with data. Intelligent designers have made the interface simple, allowing you the ability to implement changes in efficiency rapidly.

QR and barcodes assist in cloud computing of inventory data, increasing the capabilities and advantages, while reducing data input time and error rates. Programming a product barcode will allow your business to track all inventory, production usage, and sales trends for forecasting and operational analysis.

Read also: Protecting Your Investment With Business Insurance

Implementing a quality inventory management system will give greater insight into operations and department functions. The improved visibility of data encourages optimization. When you control cost and quality your customers benefit as well.

Customers like reliable businesses and vendors. Correct and timely fulfillment of orders improves customer experience and the likelihood of repeat business. Reliable operation generates reliable customers.

Accounting standards and corporate guidance rules don’t change with size. Whether wondering what you have to cook, or how many trucks just shipped for a defense contract, controlling your inventory is smart business.

Have you seen annual reports from the government sector? That detailed inventory and operational data comes from management systems. If the government can sniff out a money-saving system, it is worth looking into.

The just-in-time inventory management system is dangerous when supply chains are stretched, global transportation is experiencing traumatic setbacks, materials are expensive or not available, and lead times are growing from factories. This requires a business to invest more capital in inventory overhead. Increased inventory generates a 20% cost increase due to storage and handling. That capital can not be used for growth. Businesses that are not growing to outpace inflation are experiencing layoffs and closures.  

Of companies with high-performing supply chains, 79% achieve revenue growth that surpasses average sector growth. Sounds to me as though they are altering the average.

Not using an inventory management system is comparable to a mechanic not having wrenches to fix your car. Without the industry tools and knowledge of how to use them, how can you expect to succeed or even compete?

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