Are your inventory costs getting out of control? Are you looking for a system that can help you properly manage your inventory without wasting crucial company money? Manufacturing and distribution companies rely on manufacturing software in order to increase their overall efficiency and improve their operations. Every company is unique; therefore, each company has its own set of needs when it comes to manufacturing software. While some companies may be looking to decrease the time a particular task takes to complete, other companies may be interested in improving their financial predictions. Whatever the need may be, manufacturing software can solve the common problem of inventory costs.
Companies pay overwhelming prices in order to keep materials and resources in stock, a fact that often cripples manufacturing and distribution companies. When the actual prices become too unbearable to handle, companies turn to manufacturing software. In fact, a recent study shows that almost 52% of manufacturers found that reduced inventory costs was the primary benefit of manufacturing software. Inventory costs can be felt in a variety of different ways. Consider the following types of inventory costs and the methods by which manufacturing software can reduce them:
- Ordering Costs
Companies don’t come into being with inventory already in stock. Inventory must be produced or refined from existing materials and ingredients. There are high costs associated with acquiring such products, and companies often have to rely on credit and investments to make their procurement possible. Manufacturing software can be set up so that very precise records of what has been used in the past (and potentially what will be needed going forward) can be accessed, making correct orders and proper volumes a lot easier to come by.
- Carrying Costs
Once a company’s inventory has been produced, organizations need to create a plan to hold on to their inventory and keep it ready for sale and distribution. Some products, such as inert metals, are cheaper to store and will not require nearly as much care and investment as other products (say live animals or volatile chemicals). It’s crucial to closely monitor carrying costs of inventory, for carrying costs are often dynamic and can change based upon the price of certain supporting materials or emerging technology. A well-designed and properly implemented manufacturing software system will not only help you manage your inventory, but it will also help you better monitor your carrying costs, ensuring your cost savings.
- Shortage and Replenish
While the distribution of inventory is not necessarily governed by inventory costs, shortage and replenishment certainly are. What does this mean to your manufacturing company? This means that it can become very costly when unforeseen circumstances arise or if stores of materials need to be quickly replenished. Costs that are not planned on ahead of time are often much higher than expected and, as a result, throw off the entire cycle of procurement, ordering and carrying. Manufacturing software can be used to moderate these problems by keeping costs foreseeable and in line with the company’s prior projections.
Manufacturing software, when implemented properly, can help your company save on inventory costs, manage your inventory and projections, keep your employees on task, and streamline your processes and procedures. In order to find the right manufacturing software for your company, you need to sit down and find out what the most important feature is to you. Are you looking to improve your manufacturing processes or procedures? Are you looking for manufacturing software that will focus on saving your company valuable time and money? Do you need additional features that we have not mentioned? Planning out your expectations of what you need in manufacturing software will be beneficial when you start scouring the market and talking to vendors.
For more information on the manufacturing software selection process (or if you have any further questions about what manufacturing software can do for your company), contact us today.