May 15, 2018
By André Nel
As a manufacturer, the approach you take to managing your warehouse inventory is critical to ensuring product availability as well as hitting your sales goals. After all, your overall financial performance relies heavily on your ability to manage inventory effectively. And when you have a well-run inventory flow, you can ensure timely shipments and a productive work environment for your employees.
If you have had hiccups in managing warehouse inventory, you may need to find a better approach. Get a kick-start by focusing on the following three key areas: integrating software with back-office and accounting systems, scalability and cloud accessibility.
Integrate Management Software with Your Accounting Systems
Are you using an effective warehouse inventory management software program? Inventory management software systems are designed to track each item as it is brought into or as it leaves the warehouse so that inventory levels can be monitored over time. When you integrate your current inventory management software directly with your accounting and back-office systems, you optimize management efficiencies. Determine what your “must-haves” are in the systems you choose—where will your company derive the most value? Think about inventory tracking, security and backups, and your reporting needs.
For best results, the integration should be real-time, flexible and visible to others in the supply chain, such as suppliers and third-party logistics (3PLs) providers. A key component of integration success in 2018 and beyond is the ability to combine on-site, hosted and cloud-based manufacturing apps. How do you do this? One solution is Application Programmer Interfaces (APIs).
APIs allow manufacturers to connect platforms, apps, and systems to share data, communicate with each other, and remove obstacles to increasing revenue. Therefore, your system will need to connect to third-party APIs easily. First, determine what level of integration and automation your business wants to accomplish. Next, know that customer needs are driving API development, requiring faster means to scale up with the launch of new business models.
Businesses that choose the right software can better operate under lean inventory conditions to decrease the amount of money that is tied up in inventories. This will provide the manufacturer with the distinct advantage of operational flexibility over their competitors. Just be sure you’re getting rid of old and antiquated technology (that often results in expensive supply chains) in favor of software that can handle the speed of business today. Having your inventory system interconnect with accounting systems allows for:
- Effective planning
- Accurate inventory in financial reports
- A true picture of product availability
- Reduced labor costs and human error
Scalability: Can Your System Grow with Your Business?
Don’t forget scalability when looking for ways to improve warehouse inventory management. You may have one warehouse now, but if you add more in the future, will your inventory system be able to adapt and grow while managing multiple locations?
A number of industry experts consider scalability the key feature in inventory management; some even say it’s critical. Otherwise, replacing a small system that can’t expand with company growth will be costly and challenging, and that includes having to retrain staff on the new software. Your inventory system should be able to support long-term growth along with the continuous changes in business that will probably need adjustments to the integration.
Cloud-based Systems Mean Ease of Accessibility
Manufacturers that add inventory management under a cloud-based order management system will be able to transfer inventory between locations, lessening the need for IT training and support. Cloud-based software, or SAAS, should be able to integrate with other cloud-based platforms, where you can see and manage inventory progress remotely. This is especially helpful for companies that plan to have multiple warehouse locations. If you want to determine whether a cloud-based system is right for your company, read our recent blog.
Off to a Great Start
Talk to your current software provider about its ability to handle the integration of back-office and accounting systems, scalability and the cloud-based accessibility you’ll need. If your software is no longer a good fit, seek proposals from other providers.
Your manufacturing operation demands to have the right inventory at the right place at the right time. By implementing good management systems, you can make more informed decisions, plan for overflow and consistently deliver satisfaction to your customers.
Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.