One of the most difficult aspects of running an organization focused on manufacturing and distribution is inventory control. According to Logistics Management, an online news source for supply chain management, the costs of an inefficient inventory management solution can be just as detrimental as transportation expenses. Moving goods and components across various geographies are often cited as the biggest process cost because of the complexity of the supply chain and the impact human involvement can have on managing data. Therefore, it often gets priority in the minds of many manufacturers and distribution center operators.
However, inventory management is one of the most important and influential aspects of running an efficient manufacturing facility. Having clear visibility into stock levels helps businesses maximize the value of their product while eliminating waste. This is especially important when companies consider sources of disruption. For instance, varying demand, seasonal levels, lead time and risk all play a role in the inventory controls that manufacturers put in place.
The ugly truth behind inventory management is that virtually all organizations lose money the longer their products sit on the shelf. Logistics Management pointed out the fact that many industrial materials suppliers have components that have operational expiration dates, and any excesses can quickly lead to overhead costs. At the same time, manual processes have numerous drawbacks. Labor costs are exorbitant because there are too many workers required to keep accurate records, while pen-and-paper record-keeping often yields untrustworthy data. Furthermore, manufacturers often have to pay for warehousing space allocated for product inventory. This is why many manufacturers turn to data collection software to get better visibility and control.
With a company as large as Continental Materials, inventory can prove to be a major headache when the organization doesn't have the right systems and tools in place. Continental operated with Oracle's JD Edwards EnterpriseOne software to keep track of the six subsidiary enterprises it parents. While the company operates under a general umbrella of housing materials, each subsidiary is responsible for different aspects, including construction and heating, ventilation and air conditioning.
Imagine trying to keep track of all inventory across multiple facilities in various locations using paper-based systems. This was the reality that Continental faced, and it often resulted in extensive inventory processes that took weeks to complete and were frequently marked with errors. In fact, this system added an additional eight hours' worth of labor to generate order completion records. This impacted not only those responsible for tracking inventory but also the sales teams that needed accurate data to give customers a realistic appraisal of what the company could provide.
With RFgen's data collection solution, which integrated seamlessly with the JD Edwards environment, Continental Materials was able to use hand-held scanning equipment to get an accurate and rapid picture of their inventory levels. In just 30-hours, RFgen brought the materials company's IT department up to speed with managing the data collection application, without the need for customized macros. In addition, Continental was able to integrate a pick and ship solution that confirmed inventory on hand and in the warehouse.
When Continental experienced a problem with its JD Edwards software, RFgen was able to help it find a fix quickly. The materials company found an upgrade to the software included a glitch that kept it from doing work order completions. While JD Edwards wouldn't have a remedy for several months, bringing Continental's operations to a grinding halt, RFgen discovered a solution within 24-hours.
Inventory management solutions are only as good as the provider a manufacturer works with. Accordingly, it's critical that those wishing to keep their production and distribution operations functioning smoothly select the right software.
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