Inventory Balances

If you are in the food industry you already know that one of the primary challenges is your inventory level.  You need enough supplies to satisfy customer demand, but not too much due to obvious reasons of expiration dates and potential spoilage. 

Enterprise Resource Planning (ERP) solutions are designed to streamline operations and provide a central repository of information to effectively manage inventory processing.

A case study - VAI S2K Food: Hillcrest Foods, Inc.

Do you walk around and “look” at inventory to guess and gauge usage and need?

Many food distributors do just that.  They have been in business a long time and there is built in knowledge of customer and seasonal demand.  What moves, what does not and what to do with surpluses or not having sufficient supply and cost expense of expediting replacement inventory?

How does your organization handle recalls and FDA requirements (FDA Food Safety Modernization Act - FSMA)?  Do you have the ability to include all lot numbers on products and paperwork?  How much time and effort does it take you to process a recall?  What about the paperwork and certificates of origin?  Where are these documents found and how are they linked to your inventory?

If you are processing food inventory manually, then your ability to meet the FSMA requirements will be limited and expose your business to great risk and regulatory nightmare.

How efficiently do you process your distribution, truck loading and routing?  What tools does your ERP solution provide to ensure your customer needs are met?  How long does it take to train your workforce?  Is the equipment and process intuitive?  How many times during the day do they have to look up information and how much time does it take?

Handling inventory is a primary focus of food distributors as is financial processing.  You need to service your customers, yet also manage their credit usage on the Accounts Receivable (AR) side and expenditures via Accounts Payable (AP) on the vendor/supplier side.  The General Ledger (GL) ties all the various aspects of the financial reporting and forecasting together.

If these topics strike a nerve with your organization and you are curious if you are doing everything reasonably possible to empower your workforce and drive efficiency in your operations, then it is time to contact Dolvin Consulting.  We work with industry experts to help you look at and evaluate your organization from a fresh perspective.

We look forward to serving your needs.

Warehouse Management

There is a difference between inventory control and a Warehouse Management System (WMS).  Inventory systems keep track of product information, locations, and quantities.  WMS systems keep track of the movement of inventory.  An inclusive Enterprise Resource Planning (ERP) solution incorporates both. 

 

ERP is designed to integrate the entire organization.   That is where the drive to efficiency is able to achieve its Return on Investment (ROI).  It is the way the right hand knows what the left hand is doing.  The brain of the system like the brain in your body is right in the middle, top front.  It collects and coordinates the information it receives from its various sources, analyzes that information and provides feedback. 

 

Warehouse management systems help in managing the supply chain and tracking the movement of inventory from receipt, put-away, movement and replenishment, to pick pack and ship operations and cycle and inventory counting.  Technology is the backbone that, when implemented with the right strategy, delivers the efficiency needed to compete and ultimately deliver better customer satisfaction.

 

Monitoring warehouse activity in real-time, minimizing entry errors through automation, collecting data to measure efficiency of operations and labor are important aspects of any WMS system.

 

In order to make intelligent decisions, management needs access to as real-time information as possible.  Too much happens too quickly to have to wait hours, days or weeks to get critical information and decipher that information.  ERP systems when properly implemented are able to furnish this information in a format that makes sense.  Managers need to know what their employees are doing, where there are bottlenecks and how to address those issues.

 

Some of the benefits of WMS systems include (in real-time):

• Verifying receipts against purchase orders at the time of receipt. 
• Verifying picked items and quantities against customer orders before shipment.
• Keeping track of batches, lots and serial numbers. 
• Bar-coded inventory. 
• Tracking inventory by the piece, case or pallet. 
• Measuring employee productivity.
• Optimizing picking for single or multiple orders.
• Integration with common carrier systems to capture box information and tracking numbers.
• Customer returns tracking.
• Work-in-progress tracking.
• Production posting.
• Replenishment activities.
• Count-back verification.

WMS information can be used to properly organize the physical locations and pick order to increase employee productivity and accuracy.

 

More efficiency opportunities. 

 

More accuracy opportunities.

 

At first glance it might seem that implementing a WMS system would be too complicated for your workforce and if it could be implemented, the processing would slow down.  Do not underestimate your workforce when you enable them with the proper tools to get their jobs done.

 

For example, count back systems generate confidence in picking operations, because workers learn that they can trust the system to identify where the inventory is located and that the right quantities exist.  They learn the system recommends the right product placement so the do not have to waste time going back and forth to pick orders.  Compare that with an order that was picked and shipped incorrectly.  What happens to customer confidence in your operations?  How will management look at employee productivity?  What costs are incurred by the customer service and finance department, because they have to take care of upset or disappointed customers?  How much time does it take away from their other tasks? How much time does it take to create the return authorization, process the credit, create a new priority replacement order and absorb the associated and expedited return and replacement shipping costs?

 

Greater, more accurate throughput, inventory turns and employee productivity.

 

How is your organization taking advantage of WMS?  What efficiencies did you discover that you did not realize that you would have before implementing your WMS solution?  What solution works for your environment?   Is it a separate system or a fully integrated solution?

 

Contact us today to share your knowledge.  Your fellow readers would like to know.  We are here to help.  Dolvin Consulting works with industry leaders to help you help your organization with knowledge and industry resources.

 

Trends in Distribution Management

An overview interview of distribution management software trends in Enterprise Resource Planning (ERP) solutions.  Five key areas that are a driving concern of any wholesale distributor, distributor or manufacturer are highlighted in this five minute video.

 

SupplyChainBrain Interview with Joe Scioscia

 

Interview highlights:

1.       Utilization of Sales Force Tools

o   More information is needed besides just contact management to maximize every sale at the point of customer contact.

o   Product information at the point of contact

o   Order status to provide customer feedback.

o   Customer account information readily available.

 

2.       Analytics

o   Enterprise Resource Planning (ERP) systems can generate massive amounts of data. 

o   It can be a challenge to spot trends, anomalies or business issues within that data.

o   Present data in a more easily digestible format with charts, graphs and flagging data.

o   Creation of Key Performance Indicators (KPI) to make better and faster business decisions.

 

3.       Cloud Computing

o   Established already in some industries like payroll and Contact Relationship Management (CRM) and gaining traction in core distribution solutions.

o   Generally a better fit for companies with diverse locations without a need for a heavy Information Technology (IT) infrastructure.

o   Reduced IT management infrastructure.

 

4.       Warehouse Management Solutions (WMS)

o   Managing their biggest asset, Inventory.

o   Receiving, picking, shipping, and physical inventory benefits.

o   Cut costs, increase productivity and improve customer satisfaction.

o   Locate products more effectively, pick and ship items more rapidly, reduce errors, improve accuracy.

o   Benefits of automation.

 

5.       Top business requirements

o   Grow business.

o   Increase sales.

o   Reduce costs.

o   Sales force automation to increase effectiveness and maximize sales.

o   Warehouse management to reduce costs and increase accuracy and productivity.

o   Forecasting and purchasing applications to manage inventory levels to have the right products at the right time to satisfy their customers.

The consensus in the interview is not news for those involved in the distribution and supply chain.  How can these organizations optimize their inventory levels in order to provide great customer service and fulfill customer demand in a timely and responsive manner?

 

These challenges have not changed over time.  What has changed is the way processes can be automated to increase productivity and reduce costs.  New tools provide opportunities if implemented correctly with an ERP solution to fully integrate the organization. 

 

Whether the tools are in the cloud or on premise, what matters is having a system that fits the culture of the business and is actually utilized.  Typically a few modules at first and then more and more are implemented. 

 

The goal should be customer fulfillment and satisfaction. 

 

You get there by utilizing the resources available in the solution you have or are implementing.   That might include analytics or warehouse management and include automation tools like bar coding and scanning, count back inventory picking, shipment verification or physical changes like conveyors and robotics. 

 

Each organization has its needs and budget to address those needs.  What any building needs is a strong foundation that can support the future needs and growth of an organization. 

 

How is your organization utilizing its ERP solution to drive efficiency?  We would like to know.  Please share your thoughts here.

 

Dolvin Consulting works with manufacturers, distributors and specialty retailers to help them streamline their operations, reduce costs and increase operational efficiencies.  Contact us today to see how we can help you look at your organization with a fresh set of eyes.  Many opportunities for improvement are right in front of you and collectively they can be combined to achieve big savings.