Manufacturing products isn’t a difficult task to handle these days. There are third-party manufacturing companies you can hire to produce your products for you. Even setting up your own manufacturing line is easy thanks to modern machinery and automation. The route you choose depends on the scale of your business and how you want to approach production.
The bigger challenge lies in manufacturing the right amount based on market demands and maintaining an efficient manufacturing process at the same time. This is a challenge that you can tackle with good inventory management. Tracking inventory also brings a number of added benefits, and we are going to review them in this article.
Streamlined Manufacturing Process
One of the major benefits of tracking your inventory is having information about how many products you have in stock at any time. Meticulous inventory tracking allows you to monitor the level of inventory you have and compare that data with other metrics, including customer orders and sales.
If you take it a step further, sufficient insights also allow you to make better, more accurate forecasts. This gives you the ability to determine how much product you actually need to manufacture at any time. Other factors such as market trends can also be considered when working on the forecast.
Now that you know how many products you need to manufacture, you can also be more meticulous with the raw materials you order. Incorporating Just in Time or JIT supply chain management will be much easier to do with the right data in your hand.
Better Quality Management
Inventory management is also necessary if you want to maintain control over product quality. Rather than relying on random samples all the time, you can now pull samples from actual trackable batches of production for better quality control.
This is done by assigning batches to lots and adding serial numbers to the products you manufacture. The lot number and serial number for each product are then added to a comprehensive inventory management system such as inFlow Cloud.
When there is a product defect found – whether it is during quality control or once the products are in the hands of customers – you can anticipate the issue better by referring to the specific batch and a set of serial numbers or lot numbers. This means you can deal with issues such as product defects better.
Good View of Product Journey
The use of serial numbers or lot numbers also allows you to manage your stock better. You can, for example, ship products using a FIFO (First In, First Out) or LIFO (Last In, First Out) strategy depending on the nature of the products. Once added to the inventory, you can also monitor the product journey closely.
Monitoring a product’s journey grants you access to a wealth of information. You can figure out how long products sit in your inventory before they are sold to customers. You can also find out more about the ideal size of inventory to keep and how to maximize efficiency.
Remember that these details affect your bottom line. Storing too many products in your inventory is costly and will eat into your operational profit. Storing too few products, on the other hand, could result in your company not being able to fulfill customer orders quickly; you may even lose customers because of that. It is all about finding balance with inventory tracking.
Variable Cost Tracking
Inventory tracking plays an important role in keeping costs manageable, but it goes so much further than that. While you can maintain an efficient operation from start to finish by tracking products using serial numbers and batches, you actually have access to more management tools than you realize.
With batch tracking or lot numbers, for instance, you can now add variable costs to your manufacturing line. Rather than setting an average number, you now have the ability to calculate the production cost of any batch in great detail. Similar to the previous benefit, this too is a feature that will optimize your bottom line even further.
You can also add variable costs at every stage of the product journey. Calculating the storage cost for an individual batch is easy. The same can be said for distribution costs and handling costs for the batch. Your estimates are made more accurate now that you have more data to turn to when making them.
Easier Product Rotation
Let’s not forget that lot numbers and batch tracking also makes product rotation easier. When your products are fast-moving and have relatively short expiry dates, knowing when to recall the products and replacing them with a fresher, newer batch is critical. Incorporating an inventory tracking system is the only way to go.
With the help of lot numbers or serial numbers, you can actually monitor the product journey in great detail. You will know exactly which batch gets shipped to which retailer, which means doing specific product rotations is even easier in the future.
Based on the same data, you also have the ability to manage sales downstream. Knowing which retailers sell more and being able to study why they can move your products faster are advantages you don’t want to miss in today’s competitive market. These insights are your most powerful weapon in making further improvements.
Last but certainly not least, inventory tracking allows you to automate many things within the workflow. By using barcodes to track lot numbers, you no longer have to input data manually at every point in the product journey. Thanks to portable barcode scanners, data can be captured and stored inside a cloud-based inventory tracking system in an instant.
Can you imagine how much more efficient your operations will be with detailed inventory tracking fully automated? The amount of data that can be gathered is simply massive, and that’s a really good thing. With competitors doing everything they can to be more flexible in the market, inventory tracking is the kind of competitive advantage you want to have. It will ensure the success of your business.