Monday, May 5, 2014

Inventory Management Visibility


In order to make better decisions management needs good visibility into their inventory.  Financial, operational and purchasing decisions are better when based on accurate and timely information.  Elimination of manual processing increases the timeliness and reporting capabilities which overall increases customer service levels.

 

Customer service matters. 

 

What processes are being implemented at your organization to increase your customer’s satisfaction?  What improvements are your competitors making?

 

The right Enterprise Resource Planning (ERP) solution provides the framework for the different departmental functions to be integrated into one weave.  What makes “it” the right ERP solution?  There are many solutions to choose from today. 

 

It becomes the right solution when culture meats function. 

 

Every organization has a culture, a way of doing business.  Every ERP solution has a process which maps transaction and reporting functions to organization challenge.  The key is finding a solution that addresses the core needs while providing a growth path to future challenges. 

 

When manufacturers deal with inventory they typically will take advantage of a Manufacturing Resource Planning (MRP) module to manage how much inventory they have in their warehouses at any given time.  Real-time or near real-time reporting is optimal, and as a result better suggest how much of any particular inventory item to manufacture or purchase.

 

A consolidated view of historical usage allows both manufacturers and distributors to accurately project and plan for future need and create the optimal production or buying levels.  This accuracy allows the organization to react faster to changes in demand.

 

Companies need the visibility that ERP/MRP solutions provide. 

 

Monitoring and tracking inventory movement on the shop floor as well as in the warehouse allows organizations to plan better and minimize out of stock situations which results in better customer service and ultimately savings through automation and increased efficiencies.

 

Customer service should be a critical component for any organization. 

 

Take your own shopping or purchasing experience in mind.  How often do you like hearing “we can back order that for you” when you try to order supplies.  How competitive can your salesreps be if they have no clear idea of what is available when they are in front of your customers?

 

Greater inventory accuracy increases speed and efficiency.  Efficiency that purchasing, sales and customer service as well as production departments all take advantage of to perform their functions.  Management has the information they need to make decisions with greater confidence.

 

One of the bigger challenges is implementing the changes and new solutions needed with ERP solutions.   It is one thing to write or talk about solutions, it is quite another to commit to the changes.  Inevitably a lot of the effort should be made up front to document the processes currently being used so they can be addressed and mapped to a potential new solution. 

 

This is where the culture piece fits in.  How many steps does it take to perform a function?  A solution could be very capable, but take too much effort to achieve the advertised results.  This is also not to say that just because there are steps involved that they should be avoided.  Look for ways to automate the collection of information.  Even though there may be some additional steps involved compared to what you do now, the accuracy and benefits are usually worth the effort.

 

Making a change to an ERP solution is not comparable to picking box software of a shelf. 

 

It takes a lot of planning and analysis as well as fiscal commitment to implement an ERP solution.  Most people understand the potential benefits of increased inventory visibility and the efficiency of newer ERP solutions.  Many are concerned about the likelihood that they will have to change their operations or will have to make extensive modifications.  Neither is a good choice.  Unless there are unique requirements, you should be looking for a flexible solution that only needs minor modifications.

 

Look for solutions that provide consolidated dashboard views that give you drill-down to details.  Savings come in many forms, but typically involve automation of one type or another and the elimination of manual report processes.  Paper intensive tasks are other areas where organizations can achieve significant savings.  Planning decisions are more effective with accurate information. 

 

Make sure your system collects the right information.

 

Your competitive advantage starts with a comprehensive ERP solution that integrates your Enterprise.  Finding the right solution may take some effort, but in the long run, if you select the right solution you will wonder why you took so long to make the decision.

 

Let Dolvin Consulting help you find the right solution.  Contact us today to see how we can help you find the right solution for your challenges.

 

 

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