Friday, August 3, 2012

FIFO Inventory and the Need for WMS

There are many people seeking advice lately on how to implement various First-In-First-Out (FIFO) inventory control systems.  FIFO is simply a matter of using the oldest stock first.  If you imagine produce like bananas or lettuce, then the concept is clear.  Use it before it goes bad.  The newest inventory should have the longest shelf life.  Nuts and Bolts, for example, do not typically go bad in time, so there is less pressure to use them in any particular order.

There are numerous strategies about shelving types, flow systems, drop down, gravity feed, pallet systems.  Many people wonder about the paperwork, using colored paper and labels to indentify a product’s month of origin (this would not likely work for the food industry). 

There are suggestions about numbering systems, advice on paperwork, missing and reprinting, mapping the physical space, location of items, etc.

Granted warehouse efficiency is very important and physical layout and shelving is important, but the critical thing missing from the discussions was the need for a Warehouse Management System (WMS) that is fully integrated with an Enterprise Resource Planning (ERP) solution.

Why are people so anxious to help so quickly that they forget to mention the basics? 

A WMS system is to inventory like mortar is to a brick wall.   A good system will generate labels, if needed.  Will automate receiving and put away activities, physical inventory and cycle counting, pick, pack, verify and shipment processing.

We will talk more about the details of how a WMS system achieves the goals of efficiency in the future.  For today, we need to agree that there should be a system and that system should be managed by a solution that will let the people running the business to run the business.

If your employees are losing paperwork and you are reprinting papers, if you cannot find inventory, if excess inventory is being purchased, if employee labor overtime costs are soaring, if the only time you are sure about your inventory balances is when you are out of stock, then you have problems that can be addressed with a WMS solution. 

You cannot buy a software solution that will eliminate obsolescence, the need for training or common sense. 

A solution needs to become part of your organization’s culture.  Once people see the system working, their confidence will rise and the efficiency and savings will come.  But, only after the investment is made.  You cannot harvest a crop that you did not plant.

Now is the time to contact Dolvin Consulting.  We partner with industry experts to learn, understand, and address your challenges with simple to use, yet powerful systems.  We work with your team to match your challenges with available solutions.  We achieve great Return on Investment (ROI) so the systems implemented end up paying for themselves.  Contact us today to see how we can help your company.

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