Tired of tied-up capital in the warehouse?
Discover how to streamline warehouse management and win back control of your stock
Tired of tied-up capital in the warehouse? Win back control of your stock
Stock management is one of the keys to a successful business
Manufacturers that don’t monitor stock sufficiently are often forced to dedicate valuable time and resources to additional stock takes, in an effort to win back control. There are also those that replenish stock re-actively, only taking action when something runs out, rather than making strategic decisions and purchasing materials to meet planned requirements over time.
A company that doesn’t know what it has in stock has a much harder time planning effectively, which creates a lot of extra work. But the biggest headache of all is when delivery to customers is affected by poor material planning – this ends up being a big cost to the business.
Overstocking is also a common pitfall. Holding an adequate level of commonly used materials may be good for business, but the tendency to be prepared for anything can sometimes cross the line, resulting in “hoarding”, which leads to tying up capital which could be better utilised elsewhere.
But help is at hand. Identifying certain trends and patterns can help warehouse personnel solve problems and take charge before things get out of hand. Here are four telltale signs your company’s stock management processes may need attention.
1. You have a high volume of wastage
Sheet metal cutting processes that are inefficient can lead to high levels of scrap or off-cuts, which has a negative impact on profitability. Effectively utilizing and recycling these items is essential to keep control of costs.
The solution:
- Implementing processes which minimize material wastage is essential. Effective cutting technologies, such as nesting, alongside recycling systems, are a key tool in the manufacturer’s toolbox.
2. You can’t keep track of your materials
Sheet metal is diverse, coming in a range of grades, thicknesses, and sizes. This makes stock management complicated. Managing the range of metals your work with (for example, stainless steel, aluminum, copper) and making sure the correct type is always available is a big challenge.
The solution:
- Implementing a fully integrated Enterprise Resource Planning (ERP) system like Monitor ERP can help sheet metal manufacturers track inventory in real-time, manage re-ordering needs and streamline operations.
3. Warehouse staff have a hard time finding stock, and there’s no more space
A classic complaint heard by sheet metal warehouse staff is that they can’t find what they need, when they need it. This is a sign of poor warehouse organization, and it can result in inefficient use of time, missed sales opportunities and inaccurate forecasting.
The solution:
- A warehouse management system – or WMS – is a program that helps companies manage and control daily warehouse operations, from the moment goods and materials enter a factory or production facility to the moment they’re dispatched. This streamlines every facet of inventory management.
4. You're holding way too much stock
One of the most common problems in any warehouse is overstocking, whereby manufacturers hold excessive items of a particular material or component, tying up valuable capital and preventing investment in other areas. This can also lead to outdated stock which no longer meets required standards.
The solution:
- Just-In-Time (JIT) Inventory is based on maintaining inventory levels as low as possible by ordering products only when required. This helps minimize storage costs and reduces excess stock.
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JIT relies heavily on good relationships with suppliers, which is also a key part of any effective warehouse. Effective supplier relationship management improves flexibility, cuts lead times and ensures quick replenishment when demand rises unexpectedly.
The science of stock management
Just-In-Time (JIT) Inventory
Synchronize with sales
Warehouse management system
The takeaway
There are many pitfalls associated with stock management for sheet metal manufacturers. Holding too much of a particular material is potentially expensive; holding too little is risky. Managing volumes of waste, and running a lean, effective warehouse are crucial. Sound coordination, structure and organization of inventory and suppliers are vital in order to keep fulfilling orders on time and remain profitable in today’s competitive market.
In an increasingly digital world, sheet metal manufacturers simply have to utilize the power and capabilities of enterprise resource planning (ERP), as well as methods like Just-in-Time delivery, waste management, and nesting, in order to remain profitable and steal a march on their competitors.
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