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7 Ways to Optimize Your Inventory Management

Posted by Jason Cope, CPA on Dec 16, 2019 9:00:00 AM

As the speed of business continues to increase, manufacturing companies are increasingly turning to new technology and software to optimize their inventory management processes and systems. Lean manufacturing has become the norm, and effective inventory management works in tandem to help manufacturers cut costs and operate more efficiently. From simple labeling systems to sophisticated demand forecasting programs, the tools that manufacturers need are available to help streamline and optimize inventory management.

1. UPC Barcodes and Labeling

Using UPC barcodes and other labeling systems to assist in inventory management and product tracking may seem obvious, but sometimes smaller companies neglect to make this upgrade. Labels make it easier for warehouse staff to locate items, perform cycle counts, and conduct spot checks against inventory management software. The broad use of UPC barcodes also enables manufacturers to sell items on platforms such as Amazon and Walmart.

2. Product Life-cycle Management Software

Many manufacturers are using product life-cycle management (PLM) software that provides companies with a comprehensive view of an item from its original concept through customer delivery. PLM systems connect customer demand, product development, manufacturing, and distribution into a seamless process and improve communication, integration, and visibility between suppliers and distributors. A PLM application can serve as a data warehouse to manage all the information related to a particular product and integrate it with other business processes and programs.

3. Machine Learning Applications

Warehouse management systems are beginning to incorporate machine learning algorithms to help sense changing conditions that affect shipping. If shipping orders should suddenly switch to a request for hard-to-locate items, machine learning can adjust warehouse resources and allocations automatically, without human intervention.

4. Automation and Robotics

Manufacturing facilities in several industries have been using robotics and automation for some time now, but these technologies are now being applied to warehousing and distribution functions. The number of repetitive actions and rote tasks performed in the warehouse makes these applications ideal for adaptation to automation. Amazon and its Chinese equivalent Alibaba have highly automated their fulfillment centers and use a wide range of technologies to speed distribution processes and reduce costs.

Related Blogs:
Inventory Valuation Methods for Manufacturers
The Pros and Cons of Cloud-Based Inventory Management

5. Improved User Interface

Warehouse and logistics managers need to be able to find information on shipping status without sorting through reams of data. Warehouse management software is developing more logical, intuitive user interfaces that package the data for management decision-making as well as for easy use by warehouse employees.

6. Forecasting Tools

Forecasting software can help companies adjust manufacturing schedules and production levels quickly and efficiently in response to shifting customer demand or raw material constraints. These systems integrate and process both historical and real-time data from a wide range of sources across the supply chain, from raw materials suppliers to customers. The application of real-time data in forecasting models enables companies to pivot production schedules quickly and reduces the risk of high inventory levels.

7. Seamless Systems Integration

With advanced technologies like automation, machine learning, robotics, and AI becoming a seamless part of warehouse and distribution functions, a company’s inventory management system must integrate as well with the company’s accounting systems. With more timely data available through integrated systems, inventory levels are visible to supply chain partners, and manufacturers can better predict optimal inventory levels. Integrated systems enable more accurate and timely financial reporting, reduce back-office labor costs and eliminate errors.

If you have questions about optimizing inventory management or other questions for our Manufacturing and Distribution Services Group, please contact Jason Cope at   214-635-2508 or use the contact form below.

Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article. 

Topics: Manufacturing, inventory