• Supply Chain
  • Manufacturing

3 Areas of Your Business that Benefit from Supply Chain Innovation

Written by Elias Schoelmann
June 30, 2017

Inventory management improvements can lead to operational gains across multiple lines of business and lead to supply chain innovation..

Inventory management improvements can lead to operational gains across multiple lines of business.

Operations in the manufacturing sector are tightly linked. A change to production demands has implications all the way through to the supply chain, and vice versa.

Organizations that want to optimize processes must consider how strategic investments in one area of the business impact others. This is particularly evident in the warehouse and supply chain segments, where companies that make improvements to underlying capabilities can empower other teams to work more efficiently. For example, a CIO Review report said that companies that want to apply lean principles in the emerging Industry 4.0 operational climate benefit substantially from full visibility into all operations.

To illustrate this point, the CIO Review report pointed to a hypothetical opportunity to purchase items in bulk to obtain a lower per-unit price. The problem is that this decision would lead to more inventories in the warehouse, increased distribution demands and greater dependence on having capital on hand. As such, the complete picture of the business is required to understand if the deal will actually be valuable.

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This example highlights the interconnectedness of operations in the warehouse sector, not to mention the need to integrate big-picture business systems, such as enterprise resource planning platforms, with warehouse management software. A Manufacturing Business Technology report put the issue bluntly. It stated that many companies neglect inventory management in favor of new technologies that have a direct impact on production. In doing so, however, they fail to recognize the way inventory management practices affect the organization as a whole and miss out on valuable opportunities.

With all of this in mind, here are three non-warehouse lines of business that benefit from innovation in the supply chain:

1. Sales

The rise of additive manufacturing is combining with increased demand for custom fabrication to put considerable pressure on sales teams. If a customer calls asking how much it would cost and how much time it would take to produce a good with a slight alteration, that sales worker on the phone must be able to provide an accurate and realistic estimate. This may involve asking an engineer to adjust the digital version of the product design to figure out what the change will look like, connecting with a production manager to find out what will need to be changed on the assembly line, and interacting with warehouse leaders to figure out what supplies are available for that project and how long it will take to order new supplies.

In a traditional operational environment, the data for these various lines of business would be siloed, forcing the sales worker to make a bunch of phone calls, write a few emails and otherwise collaborate to get answers. What’s more, the possibility for delays, typos and similar problems to emerge along the way are high. This causes more time for customers to get cold feet about making an order or considering competitors. Integrating data between enterprise resource planning systems and warehouse management software can alleviate many of these challenges. With these solutions in hand, the sales worker can quickly check on inventory levels and use production schedules to project when there would be time for the new project. From there, it gets much easier to respond to customer requests in a timely and accurate fashion.

Sales workers face pressure to keep customers engaged through a combination of responsiveness and transparency that is simpler to offer when the inventory management back-end systems are informing other parts of the business.

2. Production

Just-in-time inventory management strategies give production teams the opportunity to eliminate overhead and wasted time by ensuring they have the resources they need when they need them. In the warehouse, this means cost savings as the excess stock doesn’t have to be stored away and retrieved on an ongoing basis. For production teams, however, the practice can be combined with distributed asset storage to put supplies in close proximity to work teams so they don’t have to wait on deliveries or go to the warehouse every time they start a new job.

Moving some assets out of the warehouse and into strategic locations on the production floor drives efficiency gains, but it is only possible if organizations can enable users to update inventory levels quickly. Barcode scanners and mobile data collection software management systems are vital here because they allow workers to quickly update asset levels when they use an item. This data is communicated across the ERP platform, ensuring that the distributed storage used on the production floor doesn’t impact visibility within the warehouse.

3. Field Service

As with production teams, moving some assets to strategic, distributed locations can be incredibly beneficial for service teams. This isn’t the only way inventory management gains can be applied to service operations. In many cases, service workers find themselves needing to hop into the warehouse to get a part or check in on inventory levels while in the field to ensure they can adjust to client demands in a timely fashion. This creates a situation where visibility across the entire operational ecosystem is essential for business.

Mobile data collection solutions benefit service teams, particularly when they must engage in field services operations, as they can interact directly with the inventory management system on the go. Furthermore, integration with ERP systems allows service managers to coordinate work order requirements with vendor management, purchasing and inventory modules. Being able to view all of this data in tandem with service requirements creates greater operational alignment for service workers, helping them organize tasks based on asset availability and ensure they always have what they need to get the job done.

Inventory Management Underpins Business Success

Lean strategies emphasize continuous improvement. As manufacturers continue to go lean, they must seriously evaluate how making changes in their warehouse and distribution systems can have a positive impact on the rest of the business. Neglecting inventory management represents a missed opportunity for manufacturers, but strategic technology investments can set the foundation for operational improvements that extend across the business. Manufacturers that put resources into the warehouse can use those strategies to improve sales, production and service capabilities.