That’s how George S. Chua begins his article, simply titled “Inventory Management.” This is a great article and I highly recommend you take a minute to read the whole thing.
Finding an Inventory Balance
Chua starts by talking about the difficulties manufacturers face in getting the right balance of inventory on hand. Too much inventory increases storage costs and also the risk of theft and spoilage. Too little causes production delays. What’s the solution to this problem?
Chua offers this advice: “The key to keeping things in balance is to make an educated guess of what your stocking level should be based on your historical demand, booked orders and intimate customer knowledge.”
This is sound advice, but it leaves open the question – how do business managers keep track of historical demand and booked orders? The answer is with manufacturing inventory software.
Manufacturing inventory software helps manufacturers track inventory from the time it’s ordered to the time it’s sold. Manufacturers can create work orders and bills of materials much faster when they have templates and access to a list of all the parts and materials in stock.
Using Multiple Suppliers
My favorite part of the article is when Chua says, “Part of inventory management is making sure you have multiple suppliers so that you can have a basis of comparison for the cost and the quality of your materials, and so as not to be totally dependent on just one source.”
It’s so simple and yet so smart. Inventory management is more than just tracking parts, works in progress and product shipments. It’s ensuring a manufacturer’s operations continue working seamlessly at all levels, starting with the supply chain.
Manufacturers need to take control of their supply chain by establishing relationships with more than one supplier. You shouldn’t put all your eggs in one basket. What a great insight into the power of inventory management.
Fishbowl Manufacturing helps manufacturers in many of the ways described above. Sign up for a free trial of Fishbowl to see how it can help your company.