I saw a statistic this week that made me stop in my tracks. The article I read said that if manufacturers reduced inventory mistakes by just 4%, they could gain over $400,000 annually in each warehouse location.

I mean, think about it. How much are you losing to inventory mistakes?

Syspro puts a value to each inventory mistake of $50 to $500 per mistake. If you assume that one employee makes just 10 mistakes a day, that’s $500 to $5,000 per day.

The situation may be better (or worse) at your company than the estimates quoted, but really, who wants to lose anything to mistakes? Manufacturers often act like such losses are inevitable and there’s nothing you can do about them, but I think you can fix a lot of them with the right manufacturing management software. Here’s how it can help you fix expensive inventory management mistakes.

The Domino Effect of Inventory Management Mistakes

Inventory management mistakes are like dominoes: you tip one, and it hits the others, resulting in a cascade of falling dominoes. With inventory management, one mistake is like the first domino. It sets off a chain reaction.

Here’s an example. Carl is taking a manual inventory of the widgets. He’s using a clipboard and a pencil, marking off the widgets in groups of five. He gets distracted for just a few seconds, then returns to taking inventory. Unfortunately, he’s skipped a row. Now his inventory shows 10 fewer widgets on the shelf than what is actually in stock.

That tiny error sets off a costly chain reaction. Because the system reports a shortage, purchasing places an unnecessary rush order for ten replacement widgets, spending $290 between product cost and expedited shipping. When the “missing” widgets eventually turn up, the company is left with excess stock that costs another $50–$75 per year to carry. Meanwhile, production pauses for two hours because the system shows zero available widgets, resulting in $600 in downtime. A customer order gets delayed, risking a $150 cancellation and damaging the customer’s trust. Finally, Carl and his supervisor spent an hour reconciling the numbers, adding another $65 in labor costs.

That single mistake has cost the company between $1,155 and $1,180, all from a ten‑unit counting error. That’s the real domino effect of inventory mistakes. One small error leads to bigger mistakes and finally, a loss.

Manufacturing Management Software Helps Prevent Mistakes

Now, imagine Carl taking inventory, but he’s using manufacturing management software. He uses a handheld scanner to scan the barcodes on the widget packaging to record inventory. He gets distracted again by his coworker talking about baseball scores, returns to taking inventory, and misses 10 items. Only this time, the system automatically pings him to let him know there is a discrepancy between what he has counted and what is on file. He returns to quickly scan the items, and this time, they add up.

Speeds Up Order Fulfillment

Manufacturing management software can also speed up order fulfillment. For example, it can:

• Guide staff to the right bins for FIFO fulfillment
• Assign tasks to specific employees with built-in validation tools that prevent wrong bin entries
• Ensure lot and serial number traceability throughout pick/pack and stock movements

With good manufacturing tracking software and handheld mobile scanners, you can prevent many costly errors. Tracking, tracing, and finding inventory become much easier.

PositiveVision

PositiveVision provides comprehensive software solutions for small to mid-sized manufacturing and distribution companies. We help businesses streamline processes, reduce inefficiencies, and grow revenue by leveraging advanced technologies such as Syspro ERP, Sage 300 ERP, and various business intelligence applications. Contact us for more information.

The situation may be better (or worse) at your company than the estimates quoted, but really, who wants to lose anything to mistakes? Manufacturers often act like such losses are inevitable and there’s nothing you can do about them, but I think you can fix a lot of them with the right manufacturing management software. Here’s how it can help you fix expensive inventory management mistakes.

The Domino Effect of Inventory Management Mistakes

Inventory management mistakes are like dominoes: you tip one, and it hits the others, resulting in a cascade of falling dominoes. With inventory management, one mistake is like the first domino. It sets off a chain reaction.

Here’s an example. Carl is taking a manual inventory of the widgets. He’s using a clipboard and a pencil, marking off the widgets in groups of five. He gets distracted for just a few seconds, then returns to taking inventory. Unfortunately, he’s skipped a row. Now his inventory shows 10 fewer widgets on the shelf than what is actually in stock.

That tiny error sets off a costly chain reaction. Because the system reports a shortage, purchasing places an unnecessary rush order for ten replacement widgets, spending $290 between product cost and expedited shipping. When the “missing” widgets eventually turn up, the company is left with excess stock that costs another $50–$75 per year to carry. Meanwhile, production pauses for two hours because the system shows zero available widgets, resulting in $600 in downtime. A customer order gets delayed, risking a $150 cancellation and damaging the customer’s trust. Finally, Carl and his supervisor spent an hour reconciling the numbers, adding another $65 in labor costs.

That single mistake has cost the company between $1,155 and $1,180, all from a ten‑unit counting error. That’s the real domino effect of inventory mistakes. One small error leads to bigger mistakes and finally, a loss.

Manufacturing Management Software Helps Prevent Mistakes

Now, imagine Carl taking inventory, but he’s using manufacturing management software. He uses a handheld scanner to scan the barcodes on the widget packaging to record inventory. He gets distracted again by his coworker talking about baseball scores, returns to taking inventory, and misses 10 items. Only this time, the system automatically pings him to let him know there is a discrepancy between what he has counted and what is on file. He returns to quickly scan the items, and this time, they add up.

Speeds Up Order Fulfillment

Manufacturing management software can also speed up order fulfillment. For example, it can:

• Guide staff to the right bins for FIFO fulfillment
• Assign tasks to specific employees with built-in validation tools that prevent wrong bin entries
• Ensure lot and serial number traceability throughout pick/pack and stock movements

With good manufacturing tracking software and handheld mobile scanners, you can prevent many costly errors. Tracking, tracing, and finding inventory become much easier.

PositiveVision

PositiveVision provides comprehensive software solutions for small to mid-sized manufacturing and distribution companies. We help businesses streamline processes, reduce inefficiencies, and grow revenue by leveraging advanced technologies such as Syspro ERP, Sage 300 ERP, and various business intelligence applications. Contact us for more information.

Linda Baran

Linda Baran is in charge of the people side of PositiveVision. Linda’s background includes working in a variety of industries including investment, manufacturing, and information technology.