If you’re running a manufacturing company, you probably have some kind of system to manage stock and inventory. However, a surprising number of companies still do that in very old-fashioned ways – whether that’s a spreadsheet or a manual system.
If you’re one of them and find that you sometimes struggle to keep a handle on your stock, you’re not alone. Investing in manufacturing stock management systems that work might be the best thing you can do for your business, and here’s why.
Supply Chain Problems
The first and most important reason you need to keep a closer eye on your stock levels right now is that we really are in the middle of a supply chain storm.
Various factors, from the ship that blocked the Suez Canal for a week to the pandemic to the war in Ukraine, are all causing chaos in getting goods from one place to the other. Where you used to be able to order items you were short of and get them quickly, you’re now likely to wait weeks or longer to replace stock that you’ve run out of.
Order Delays Anger Clients
At the same time, it’s harder than ever to get the materials you need to complete your manufacturing orders. Your customers still expect to get their orders on time.
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It’s very difficult to explain to a customer that their order has been delayed because you ran out of stock to make it. In fact, if you do that, you might find that you see an increase in cancelled orders, as your customers choose to work with companies that have enough raw materials in stock.
Losses and Shrinkage
Another critical reason you need to manage stock carefully is that if you don’t, there’s every chance that materials are missing from your storerooms. Whether we like it or not, not every employee is as honest as we think they are. Even with cameras and other security measures, it can be very hard to tell the difference between legitimate draws from stock and stock theft.
A comprehensive stock management system that matches materials to orders and monitors stock coming into and going out of the system can help you identify possible security problems.
Balancing Costs and Expenses
Sometimes, it makes sense to buy materials in stock if you can get a better deal on bulk buys. However, certain items might sometimes move so slowly that the holding and storage costs to have large quantities on hand don’t justify the purchase. The only way you can keep track of all your materials and stock in enough detail to know the difference is if you have a detailed, accurate stock management system.
Monitoring Replacement Parts
Finally, remember that it’s not just materials for orders that you will keep in stock. You’re likely to keep replacement parts and consumables for your equipment in stock too. Not having those items on hand when one of your machines has a problem could grind production to a halt.