Establishing consignment inventory management capabilities can empower organizations to put products in closer proximity to their customers, alleviate order fulfillment burdens and improve efficiency across the supply chain.
However, organizations working to establish consignment inventory management models create added management overhead as companies try to gain visibility into inventory levels and asset dispositions.
According to a PricewaterhouseCoopers report, many businesses run into challenges trying to manage consignment inventories largely because their existing ERP systems and data workflows are not up to the task of covering the diverse locations and processes involved in the strategy. In response, many companies establish manual processes to gather data and transmit it between locations. These manual processes don’t just introduce complexity, they also create gaps between systems that can lead to data accuracy and quality problems. All told, companies end up in a situation in which data in the ERP ends up segregated from other systems, leading to contradictory and potentially damaging data management problems. Reexamining data management procedures and ERP capabilities is vital as organizations respond to this trend.
While these potential problems are substantial, a Spend Matters report pointed out that consignment inventory strategies can offload some of the warehousing and storage costs suppliers typically need to deal with. The key is to develop strategies that maximize the potential of consignment inventories by simplifying data management procedures and leveraging technology to break down geographical barriers. Three tactics that are particularly beneficial and are consignment inventory management best practices are:
1. Establish an ERP Integration Framework
Ensuring inventory levels in a consignment stock location and within the ERP are accurate is essential. Issues with data synchronization and compatibility between disparate systems can quickly derail any consignment inventory program. ERP integration tools can:
- Compile data from multiple source types into the ERP system automatically.
- Alleviate the user data entry burden by automatically updating the ERP when data changes in other systems.
- Reduce the likelihood of error by eliminating unnecessary manual processes.
- Free employees to spend more time on value-focused tasks and less on data entry.
These benefits make ERP integration essential as organizations diversity their asset storage strategies through a consignment inventory management strategy.
2. Leverage Mobile Data Collection Tools
ERP integration is a necessary step in a consignment inventory strategy, and mobile data collection capabilities can take the value offered by an ERP to another level. Barcode scanners that can be used to perform cycle checks or update asset dispositions in real-time as users access inventories can simplify documentation for customers housing goods in their own facilities. Furthermore, the ability to automatically catalog processes digitally makes it easier to automatically move data into the ERP, further reducing the need for redundant data entry.
Asking users to update checklists and files manually only to then go and add that data to a computer system creates room for error and makes it more difficult to gain proper visibility into assets. Mobile data collection tools, on the other hand, initiate automated data synchronization processes and ensure near-constant transparency.
3. Apply Remote Management Functionality
Tools for remote site management allow information generated by mobile data collection tools to reside in local software when an internet connection is not available. The data operates normally and is updated as relevant. Once a connection is available, the system will automatically synchronize with an ERP. Essentially, remote management tools allow for greater coordination between facilities even when typical processes go wrong.
When combined, ERP integration, mobile data collection and remote management come together to transform consignment inventory management. Instead of a process that is tedious and filled with slow, manual processes, organizations get a simple, streamlined data ecosystem. With data from consignment inventory locations integrating into a central ERP accurately, organizations can:
- Simplify any management tasks performed by their customers.
- Automatically identify when inventories get low and ship out new products accordingly.
- Create a built-in audit trail for all parties involved.
- Limit asset damage and loss through greater transparency into inventories.
These types of benefits can come together to transform operations for organizations relying on consignment inventories, and they did so for CryoLife.
Consignment Inventory Management in the Real World: CryoLife Customer Story
CryoLife, a global biomedical company, came to RFgen looking for a solution that would help it move past paper-based processes and help it update its data management procedures. The company serves more than 550 hospitals and surgical centers and needed to establish a system that would allow them to manage consignment inventories across those locations with greater precision. We were able to set them up with RFgen Mobile Foundations for SAP, a software system pre-built for data collection within an SAP ERP environment. Furthermore, they could run apps on iOS, Windows and Android devices, creating flexibility in terms of data capture and connectivity.
With our data collection and ERP integration capabilities in hand, CryoLife was able to go paperless through mobile data collection, and conduct cycle counts while representatives were offline in hospitals and automatically synchronize when those workers reconnect with the network. Users could even submit inventory photos, trace any lot-controlled or serialized product and handle cycle counts in multiple languages with localized date formats.
Modern data management technologies can empower businesses to take full advantage of what consignment inventory strategies offer. Effectively digitizing data collection and integrating information across locations is instrumental in this process. All told, keeping supplies closer to customers can improve client satisfaction and reduce warehousing inefficiencies. With contemporary software systems in hand, companies can glean even more value from such strategies and mitigate any potential risks.