Essential Supply Chain Management Tip: Know Your Customers

The whole point of managing supply chains is to make sure your customers’ needs are taken care of. You want to have the right parts and products on hand when your customers are ready to buy them. That’s how your business can enjoy steady growth and health.

Know your customers to manage inventory efficiently, QuickBooks Manufacturing BlogBut every business is different and their target customers don’t have the same buying habits. So it stands to reason that there’s no one-size-fits-all approach to supply chain management.

For example, if you’re a manufacturer who mostly supplies government contractors or large organizations with pipes, metals, textiles, etc. you probably don’t need to keep a huge amount of inventory in stock. You can get away with having longer wait times.

But if you supply consumer products to retailers, you probably don’t have the luxury of long lead times and you need to make sure your customers stay well-stocked. Thus, you need to keep more raw materials in your warehouses or other facilities so you can act quickly when orders come in.

Your customers’ needs affect your storage space, the number of items on your shelves, your reordering practices, and many other parts of your business.

As long as you know your customers, you can stay on top of your inventory and achieve the end results you want: happy customers, operational efficiency, and conserved resources.

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Disruptive Inventory Management Technology Is Coming

All around us we keep hearing about disruptive technologies being developed. These are game changers that interrupt business as usual and force people and companies to adapt to a new environment.

What new disruptive technology is coming to inventory management? QuickBooks Manufacturing BlogFor example, there are driverless cars being tested in Japan that could seriously change the revenue sources as well as the long-held policies of insurance companies, police forces, public utilities, and parking lots, just to name a few.

And then there’s 3D printing, which has the potential to change not only consumer manufacturing operations but home construction, food production, and many other industries.

What about inventory management? What disruptive technology is in the works to shake things up in this important area of running a business?

Here are a few developments that fit the bill by making advanced inventory management tools available to more companies and also making them easier to use:

Online Inventory Management

When Intuit launched an online version of its popular QuickBooks software it was a glimpse into the future of accounting. Most companies still do their accounting on a desktop software application, but the SAAS model is suddenly becoming more attractive.

This is a challenge to inventory software providers to step up to the plate and change. It will be interesting to see who takes up that challenge first and comes out with a complete online inventory management solution that integrates with QuickBooks.

This is extremely disruptive to the normal way of doing business because it means software developers have to work with multiple browsers, not just operating systems. Plus, it changes the whole pricing scheme for inventory software. And it encourages a BYOD (Bring Your Own Device) mentality at businesses using inventory software. This has many benefits and risks attached to it.

Alternative to ERP

ERPs are traditionally incredibly expensive software platforms. Most small businesses can’t afford them, even though they’re extremely helpful in managing a business’ finances, inventory, and other logistics. It’s especially useful to large corporations with complex operations.

What if a comprehensive solution comes along that does much of what ERPs do, but at a fraction of their price? It’s already happening. Inventory management software providers can integrate their software with QuickBooks and other tools to create something that roughly does the same thing as a full ERP, and it’s actually affordable to small and midsize businesses.

What other disruptive technologies might be coming to shake things up in inventory management? I welcome your thoughts.

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10 Reasons to Be Upbeat About the Manufacturing Industry

The U.S. economy is holding steady and jobs still haven’t fully recovered from the recession several years ago, but that hasn’t stopped the manufacturing industry from having a great year in 2013. The future looks even brighter for it, too.

Things are looking up for the manufacturing industry in 2014, Fishbowl Inventory BlogHere are 10 positive signs that should give us hope about the health of the U.S. manufacturing industry, as a whole, from Business Insider and Bloomberg:

  1. The manufacturing sector grew for the seventh straight month in December 2013.
  2. The U.S. economy has grown for 55 straight months through December.
  3. New orders and employment are both in positive territory.
  4. New orders are the highest they have been since 2010.
  5. Thirteen manufacturing industries expanded in December and only four contracted in December.
  6. In November and December manufacturing grew at its fastest rate since 2011.
  7. Rising sales, international demand, and investment are fueling the strong manufacturing numbers.
  8. In November construction spending increased to its highest point in more than four years.
  9. The 2014 forecasts for manufacturing growth increased from 2013’s.

10. Consumer confidence is at its highest level since 2008.

Of course, this good news doesn’t guarantee smooth sailing. We’ll see if things continue to play out well. It’s just nice to see that there are plenty of positive trends as we continue to do our best in a turbulent and ever-changing world.

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5 Ways E-Retailers Can Reduce Product Returns

The Christmas season is the biggest time of the year for sales across the country. But on the flipside it also leads to the biggest returns of the year as people face buyer’s remorse, incorrect sizes, lack of funds, or other problems and decide to send merchandise back where it came from.

Reduce customer returns with five simple tactics, QuickBooks Manufacturing BlogIt’s a scary (and poorly reported) fact that one-third of all products sold online are returned. In the virtual world where people can’t try on clothes or make sure they like all the features on pieces of hardware before purchasing them, you’ve got to expect that mistakes will be made and people will need to return items from time to time.

But one-third still seems pretty extreme. There are some cases where people habitually take advantage of lenient return policies to try out expensive products they have no intention of keeping. Businesses need to balance the legitimate need customers have to return products with the potential abuse that can come from being too open.

How can you minimize returns and keep your customers happy? Here are five ideas, which are primarily aimed at ecommerce retailers:

Keep track of what your customers order and return so that you can make suggestions when they order something new. If they usually get the wrong size or model of a product, remind them of that fact so they can make a smarter purchase the first time.

Send detailed instructions on how to properly use and care for items so they don’t break or run into other problems during their initial use.

Offer discounts on products that have lower return rates to steer customers toward them if there are comparable items that are returned more frequently.

Reward customers who rarely return items with special offers, discounts, and other incentives to thank them for their loyalty and easiness to work with.

Empower your customer-service representatives to help customers rather than waiting for a manager to make a final decision. Customers appreciate swiftness in resolving their concerns and they are often willing to accept a price reduction or other offer rather than go through the process of returning a slightly damaged item.

By following these guidelines, and using other customer-focused tactics that address your business’ unique situation, you can significantly reduce the number of returns you receive without sacrificing customer service.

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Never Say Yes to Someone Who Won’t Take No for an Answer

I recently got a call from someone who desperately wanted to come across as my friend. He buttered me up with praise for my exemplary work as a writer, and he told me how special I am because I just qualified for an exclusive offer.

Some people refuse to let you say no, QuickBooks Manufacturing BlogI listened patiently and spoke kindly with him – the whole time dreading what I knew was coming. After 15 minutes, he finally came to the point: He wanted me to pay an enormous fee for a special privilege I knew I didn’t need, and I had to make a final decision right then.

I apologized to him for wasting his time because I would not be able to purchase anything from him. He then proceeded to cut the price in half two times to try to entice me to purchase, and I did my best to politely let him down each time.

He got more desperate to make a sale as time went on and he used a lot of tricks to try to get me to change my mind. Three times he said, “Just one more thing and then I’m done,” and all three times he kept going right after he finished making his point and I still said no. He wouldn’t take no for an answer, but that was all I could give him.

Near the end of our conversation, he demanded to know why I was so obstinately opposed to what he was offering me, which he said was clearly a wonderful service to any right-thinking person.

I realized that my reason for declining his offer was more than the fact that I knew he was selling something I didn’t need. I didn’t know how to say it politely, so I finally told him that I cannot purchase something over the phone when I do not have time to fully research  it because I am in a high-pressure situation where I’m required to make an immediate decision.

He was upset at my blunt words and insisted that I was passing up on an important opportunity. Maybe I was and maybe I wasn’t, but the point is that had I committed myself to a purchase in such a foolhardy way, I would have set a precedent that could open myself up to other chances to recklessly spend money in the future. There’s no way I can do that.

People can say anything to you to try to get you to do what they want. You have to be smart and never let your guard down. Whether it’s someone selling you something, inviting you to try something new, asking you to enter into a relationship, or many other situations, you must think rationally before deciding and not make snap judgments.

Any of the things I mentioned could be good or bad. I’m not saying that salespeople are inherently bad or that everyone is trying to take advantage of your weaknesses. You simply have to be in control of your decisions rather than allowing others to make them for you.

Don’t trust people who don’t allow you to simply say you’re not interested right now in what they’re offering. People who try to induce you to take action by applying unwarranted pressure and failing to give you time to make up your mind don’t have much credibility in my eyes.

You should only trust people who encourage you to get the facts before making a final decision on whether something is right for you or not. That’s acting out of confidence, not fear that someone will discover the ugly truth or get sidetracked and not take a desired action.

I know this is completely off topic from my usual discussion of QuickBooks manufacturing software. I will return to that soon enough. I just feel it’s important to share my experience and thoughts so you can avoid similar traps.

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Don’t Wait to Innovate the Way You Manage Inventory

A little over a decade ago, inventory management software was just starting to reach small and midsize businesses. It’s been an uphill battle, but many SMBs are now convinced that automating their inventory management processes is the best way to save money and compete with large companies.

Don't wait to leave the crowd and start innovating, QuickBooks Manufacturing BlogGone are the days of pen and paper or Excel spreadsheets to try to manage inventory. These tools aren’t enough to manage hundreds, or even thousands, of parts in multiple locations.

They invite disorder by making it easy for mistakes to creep into a business’ data and for important information to be lost. They’re also terribly inefficient because everything must be entered by hand.

Inventory management software solves these problems. A good one can reliably track tens of thousands of items across as many locations as necessary. It can also automatically receive and send orders through barcode scanners and data transfers to and from vendors and customers

If you’re not already using a software solution, you shouldn’t wait too long to take that big step. It will likely remove barriers you are facing and help you smooth out your operations in new ways.

Get an inventory software demo today to start seeing it in action.

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The Booming Robot Economy Benefits Humans, Too

Somewhere between The Matrix and The Jetsons is the future of robotic technology. As the prices of robotic equipment, maintenance, and implementation go down, the technology will be implemented more and more in manufacturing and other industries.

Robots are improving efficiency and creating new jobs for humans, QuickBooks Manufacturing BlogJobs that can be automated most likely will be eventually. Rote, low-skill tasks are the first that are being automated. For example, Amazon invested heavily in warehouse management robots to cut down on labor expenses and improve its efficiency in fulfilling orders.

But what if someday repairmen, cooks, and accountants are replaced by highly specialized machines that can do the same work faster and with fewer mistakes?

It’s a scary thought. But it’s also a hopeful one. You just might have to change your perspective a bit.

The invention of the automobile put a lot of horse coachmen out of jobs. Personal computers made typewriters obsolete. Every new invention leads to a disruption in the market and the workforce. But that’s the beauty of innovation. It forces everyone to get creative and it improves their standard of living over time.

When important tasks are handled by machines, it frees up more of people’s time and money to dedicate to other areas of self-improvement. As of yet, high-tech machines aren’t able to diagnose and fix their own problems. High-paying maintenance jobs are being created for humans in new fields thanks to the robotic revolution.

According to a Material Handling & Logistics article, “Jeff Burnstein, president of the Association for Advancing Automation, explained that robotics will create up to 1.5 million jobs between now and 2016.”

Of that number, Burnstein estimates the following numbers of jobs related to robotics will open up in these industries:

  • Consumer Electronics – 200,000 jobs
  • Manufacturing – 100,000 jobs
  • Food Production – 80,000 jobs
  • Electric Vehicles – 50,000 jobs
  • Wind Power – 10,000

Some jobs are going to disappear as a result of new technology, but better, more advanced jobs will take those old ones’ place. It’s up to us to be ready for these radical updates in the workforce and be flexible enough to change with the times.

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