Conquering A Company’s Worst Nightmare
In a world where resources are scarce, manufacturers fall victim to what we term as obsolete inventory. This refers to the end-stage of a product’s marketability but it still has not been sold or used for a period of time. Not only are the materials wasted but also, the time and opportunity that could have been used to earn more profit. This problem in the supply-chain must be resolved immediately to avoid further collapse.
There are different causes as to why this happens. It differs from one shop to another but there are common denominators:
• One is poor demand management practices which eventually lead to inefficient inventory. When managers fail to monitor the demand and the amount that are still on-hand, it leads to excessive production.
• Related to this is the poor forecasting of resources that will be needed for the coming days. When the estimation is not done properly, there is a tendency to go over or under the required amount.
• Obsolete inventory may also stem from inaccuracies in data. Since the basis of forecasting and estimation is the data that were gathered and analysed, errors will definitely affect the entire chain.
• Inconsistent monitoring is also another culprit. Proper scheduling must be done to ensure that the manager knows the situation.
• The quality of products should be also be checked because low quality can also contribute to obsolete inventory. Customers always want high-quality services. Hence, they won’t buy those that are not worth their money.
There are things that you can do to avoid wastage of excess materials:
• The use of estimation tools which can provide precise data and avoid human error can lead to better forecasting.
• There are also available software that you can use for resource management. The features of which focus on how you can improve the current style that you now have.
• The establishment of a regimen that can give you a bigger picture of the relationship between the supply and the demand side is also another solution.
• Training the entire staff and creating an effective schedule are also simple ways that can solve complex inventory problems.
Some of the software that you can use are:
• Fishbowl Inventory
• Lead Commerce
• eTurns
• Inform ERP
• Brightpearl
• Daptiv PPM
• Ganttic
• Condeco Desk Booking Software
Staying competitive amidst the rise and fall of the global economy is the key to the success of a business. One wrong move and you may be out of the competition in an instant. Techniques and strategies must be developed to avoid one of the worst nightmares of businessmen. Being innovative will surely keep you on the loop.
The potential to come back after experiencing a major loss depends on the attitude of manufacturers. However, let us not wait for our downfall to happen. Slacking off will do more harm than good. As they say, prevention is better than cure. Improve your utilization and increase your visibility. Do it now and don’t scramble on the last minute.
