What Can an Inventory Management System Do for My Manufacturing?

By Rackbeat January 16, 2024

An inventory management system for manufacturing? Perhaps it doesn’t sound like the most obvious answer to your prayers. After all, isn’t inventory management about receiving goods, storage, inventory counting, warehouse layout and the picking and packing of sales orders?

Yes, it is. However, an inventory management system actually handles many processes and tasks that directly impact whether your manufacturing runs smoothly without interruptions and whether your customers receive the service they expect.

Because without the proper order in the inventory, control over stock movements and the registration of your material usage, you can never be sure that you have enough raw materials ready to complete a production order on time. And that’s precisely what an inventory management system can help you with.

At the same time, it also provides an overview of your production orders and the sub-components involved, so you don’t have to cling to spreadsheets or other less automated tools to plan your production.

So, let’s delve deeper into exactly how an inventory management system can help your production with these 5 key points.

 

1. Monitoring Your Inventory in Real-Time

If there’s something that can kill the trust of your customers, it’s being late with the goods they ordered. Therefore, you must avoid hitting the wall called production stoppage at all costs. It may be challenging to guard against defective machines or employee illness, but you can contribute to preventing downtime by ensuring an adequate supply of raw materials in time for your production.

Here’s where you find one of the core functions of an inventory management system, as it acts as a 24-hour watchdog over your inventory. So, every time a product arrives at or leaves your warehouse, your available stock automatically updates.

Moreover, the system can provide reorder recommendations when your raw materials start running low. In other words, by monitoring the raw material inventory in real-time, the inventory system can warn you before you find yourself lacking a component necessary for your production.

 

2. Assembly of Sub-Components with Bills of Materials

Your finished goods can be more or less complicated to assemble, either consisting of many or few sub-components and you may produce vastly different products. Regardless of the size and scope of your manufacturing, it’s crucial for the sake of efficiency and organization that you have a clear roadmap for the creation of your final products.

This is where the bills of materials come into play.

In the inventory management system, you can create a bill of materials for each finished product, ensuring clarity on all the sub-components, including the quantities involved in the specific production. You can even see where the individual parts are located, the quantities of sub-components and finished goods available as well as what’s currently in production.

Thus, the bills of materials provide you with the recipe for manufacturing success. Every employee gets a clear plan for what is needed to produce the finished goods, while the production manager can ensure the supply of raw materials, turning the bill of materials from a digital memory aid into reality.

 

3. Planning Assistance Through a Production Overview

Most companies experience both periods of relative calm and periods when a flood of orders pours into the inbox. Coping with all orders on time requires a cool head, whether you’re working at a relaxed pace or racing against the clock.

In both cases, having a structured production plan strengthens efficiency and streamlining.

Once again, an inventory management system is a very helpful tool. It provides a complete overview of the ongoing production orders, who placed them, which employee is in charge of production, when the finished product needs to be delivered and the bills of materials required.

In this way, the inventory management system enables you to plan and organize your production orders, ensuring you don’t get overwhelmed – even when things get hectic.

 

4. Recording of “Simple Waste”

Even though it would be amazing, everything cannot always go 100% according to plan every time you manufacture your goods. It’s difficult to avoid minor accidents, such as the breaking or expiration of the raw materials intended for production.

When that happens, your inventory and accounts need updating, and new goods must be ordered to prevent production stoppage. Therefore, it’s crucial that you record the waste of raw materials that will inevitably occur in the heat of battle.

This is something an inventory management system can do for you if you’re dealing with what can be termed “simple waste.”

Simple waste refers to the additional, unintended consumption of whole units or quantities of raw materials. For example, it could be a wheel or a nut. Yet, If you’re dealing with more complex waste, such as losses calculated in liters, centimeters, grams, etc., it’s recommended to either use a formula in a spreadsheet to calculate the waste or get a production management system custom-made.

However, the ability to work with simple waste allows you to adjust the quantities of goods used in each production under your bills of materials, ensuring order in the inventory and accounts.

 

5. Tracking of Your Raw Materials

You can also be hit by a slightly more severe headache caused by wasted goods. While simple waste deals with defective raw materials during the production phase, before the customer receives the finished product, you can also be notified of errors in the raw materials after the customers have received their deliveries.

This is, of course, a more complicated issue to resolve. It may mean that there are defects in the entire batch of raw materials you purchased from your supplier. So, what do you do?

Well. Once again, an inventory management system will help you mitigate the loss of resources. It gives you the option to track the batch or serial numbers of your products, allowing you to quickly trace all the goods belonging to the same batch or lot. This enables you to recall them to your warehouse and send them back to the supplier in a rather quick fashion.

Thus, even though you can’t recover the “wasted” production, an inventory management system allows you to quickly recall your raw materials so you can rectify the damage immediately.

 

Find out What Rackbeat’s Inventory System Can Do for Your Manufacturing

If you could use an inventory management system that can be a watchdog for your raw materials and plan your production, you might want to take a look at Rackbeat’s cloud-based warehouse management system.

You can also go right ahead and get a personal presentation of Rackbeat. Here, one of our product specialists first gets acquainted with your workflows and needs by asking questions pertaining to your specific company, after which the specialist shows you how the system can optimize your manufacturing.

 

Book a Free Demo